Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files).

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, ora smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated ~~filer”~~filer,” “smaller reporting company” and ~~“smaller reporting~~“emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

As of ~~October 27, 2017, 70.1~~August 2, 2021, 72.8 million shares of common stock were outstanding.

	September 30,			December 31,			June 30,			December 31,
	2017			2016			2021			2020
ASSETS
Cash and cash equivalents	$	225.8		$	317.5		$	237.2		$	288.8
Receivables, less allowances for doubtful accounts of $33.0 in 2017 (2016 - $35.9)		1,382.9			1,331.3
Receivables, less allowances for credit losses of $10.7 in 2021 (2020 - $15.9)								926.3			1,009.2
Inventories (Note 4)		457.1			386.8			348.7			302.1
Assets held-for-sale								21.0			23.1
Prepaid expenses and other current assets		152.8			136.7			156.5			133.4
Investment in LSC and Donnelley Financial (Note 2)		—			328.7
Total current assets		2,218.6			2,501.0			1,689.7			1,756.6
Property, plant and equipment-net (Note 5)		624.6			650.3			420.0			438.8
Goodwill (Note 6)		587.6			602.0			408.4			410.6
Other intangible assets-net (Note 6)		150.5			171.9			59.2			68.8
Deferred income taxes		123.2			108.9			73.5			78.5
Operating lease assets								210.2			223.8
Other noncurrent assets		252.2			234.7			139.9			153.8
Total assets	$	3,956.7		$	4,268.8		$	3,000.9		$	3,130.9
LIABILITIES
Accounts payable	$	996.5		$	985.3		$	734.4		$	804.5
Accrued liabilities		463.9			541.7
Accrued liabilities and other								304.4			351.2
Short-term operating lease liabilities								68.9			73.4
Short-term and current portion of long-term debt (Note 15)		17.9			8.2			79.3			61.1
Total current liabilities		1,478.3			1,535.2			1,187.0			1,290.2
Long-term debt (Note 15)		2,232.2			2,379.2			1,462.6			1,442.0
Pension liabilities		103.2			119.4			80.3			89.5
Other postretirement benefits plan liabilities		130.2			134.1			52.2			55.8
Long-term income tax liability								60.3			68.3
Long-term operating lease liabilities								147.8			156.9
Other noncurrent liabilities		175.8			193.1			254.5			272.0
Total liabilities		4,119.7			4,361.0			3,244.7			3,374.7
Commitments and Contingencies (Note 14)
EQUITY (Note 10)
RRD stockholders' equity
Preferred stock, $1.00 par value
Authorized: 2.0 shares; Issued: None		—			—
Authorized: 2.0 shares; Issued: NaN								—			—
Common stock, $0.01 par value
Authorized: 165.0 shares;
Issued: 89.0 shares in 2017 and 2016		0.9			0.9
Issued: 89.0 shares in 2021 and 2020								0.9			0.9
Additional paid-in-capital		3,450.7			3,468.5			3,030.0			3,263.6
Accumulated deficit		(2,160.6	)		(2,155.4	)		(2,251.4	)		(2,240.7	)
Accumulated other comprehensive loss		(126.5	)		(55.7	)		(142.9	)		(153.9	)
Treasury stock, at cost, 19.0 shares in 2017 (2016 - 19.1 shares)		(1,341.4	)		(1,364.0	)
Treasury stock, at cost, 16.2 shares in 2021 (2020 - 17.6 shares)								(893.9	)		(1,127.6	)
Total RRD stockholders' equity		(176.9	)		(105.7	)		(257.3	)		(257.7	)
Noncontrolling interests		13.9			13.5			13.5			13.9
Total equity		(163.0	)		(92.2	)		(243.8	)		(243.8	)
Total liabilities and equity	$	3,956.7		$	4,268.8		$	3,000.9		$	3,130.9

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Products net sales

$
1,322.0

$
1,327.8

$
3,830.9

$
3,772.5

Services net sales

412.9

397.8

1,182.9

1,201.6

Total net sales

1,734.9

1,725.6

5,013.8

4,974.1

Products cost of sales (exclusive of depreciation and amortization)

1,064.1

1,030.7

3,065.7

2,958.1

Services cost of sales (exclusive of depreciation and amortization)

346.4

330.7

992.8

1,002.9

Total cost of sales

1,410.5

1,361.4

4,058.5

3,961.0

Products gross profit

257.9

297.1

765.2

814.4

Services gross profit

66.5

67.1

190.1

198.7

Total gross profit

324.4

364.2

955.3

1,013.1

Selling, general and administrative expenses (exclusive of depreciation and amortization)

207.7

218.1

643.6

681.0

Restructuring, impairment and other charges-net (Note 7)

33.8

10.8

46.7

24.3

Depreciation and amortization

47.0

51.0

143.1

153.5

Other operating expense (income)

—

0.3

—

(12.0
)
Income from operations

35.9

84.0

121.9

166.3

Interest expense-net

43.5

48.8

137.3

150.6

Investment and other income -net

(2.8
)

(1.0
)

(47.2
)

(0.4
)
Loss on debt extinguishments

6.5

—

20.1

—

(Loss) earnings before income taxes

(11.3
)

36.2

11.7

16.1

Income tax (benefit) expense

(3.5
)

13.9

(7.4
)

12.9

Net (loss) earnings from continuing operations

(7.8
)

22.3

19.1

3.2

(Loss) income from discontinued operations, net of tax (Note 2)

—

(29.1
)

—

15.8

Net (loss) earnings

(7.8
)

(6.8
)

19.1

19.0

Less: Income attributable to noncontrolling interests

0.2

0.3

0.7

0.8

Net (loss) earnings attributable to RRD common stockholders

$
(8.0
)

$
(7.1
)

$
18.4

$
18.2

Basic net (loss) earnings per share attributable to RRD common stockholders (Note 11):

Continuing operations

$
(0.11
)

$
0.31

$
0.26

$
0.03

Discontinued operations

—

(0.41
)

—

0.23

Net (loss) earnings attributable to RRD stockholders

(0.11
)

(0.10
)

0.26

0.26

Diluted net (loss) earnings per share attributable to RRD common stockholders (Note 11):

Continuing operations

$
(0.11
)

$
0.31

$
0.26

$
0.03

Discontinued operations

—

(0.41
)

—

0.23

Net (loss) earnings attributable to RRD

(0.11
)

(0.10
)

0.26

0.26

Dividends declared per common share

$
0.14

$
0.78

$
0.42

$
2.34

Weighted average number of common shares outstanding:

Basic

70.2

70.0

70.1

70.0

Diluted

70.2

70.5

70.3

70.5

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
Net sales		1,145.6			1,009.6			2,318.7			2,226.5
Cost of sales		928.1			817.3			1,877.1			1,785.9
Gross profit		217.5			192.3			441.6			440.6
Selling, general and administrative expenses (exclusive of depreciation and amortization)		143.8			138.8			297.1			298.7
Restructuring, impairment and other expense -net (Note 7)		9.7			28.4			15.5			39.6
Depreciation and amortization		32.9			36.9			66.7			76.1
Other operating expense		2.9			7.2			9.0			12.1
Income (loss) from operations		28.2			(19.0	)		53.3			14.1
Interest expense-net		38.5			34.6			69.0			68.5
Loss on debt extinguishment		6.2			0.4			6.2			0.2
Investment and other income-net		(4.9	)		(3.4	)		(9.7	)		(7.2	)
Loss from continuing operations before income taxes		(11.6	)		(50.6	)		(12.2	)		(47.4	)
Income tax (benefit) expense		(2.4	)		6.6			(1.3	)		2.8
Net loss from continuing operations		(9.2	)		(57.2	)		(10.9	)		(50.2	)
(Loss) gain on sale of discontinued operations, net of tax		—			(1.3	)		0.6			(6.3	)
Gain (loss) from discontinued operations, net of tax		—			1.3			—			(13.6	)
Net income (loss) from discontinued operations (Note 2)		—			—			0.6			(19.9	)
Net loss		(9.2	)		(57.2	)		(10.3	)		(70.1	)
Less: income attributable to noncontrolling interests		0.2			—			0.4			0.1
Net loss attributable to RRD common stockholders	$	(9.4	)	$	(57.2	)	$	(10.7	)	$	(70.2	)

Basic and diluted net (loss) earnings per share attributable to RRD common stockholders (Note 11):
Continuing Operations	$	(0.13	)	$	(0.79	)	$	(0.16	)	$	(0.70	)
Discontinued Operations	$	—		$	—		$	0.01		$	(0.28	)
Net loss attributable to RR Donnelley stockholders	$	(0.13	)	$	(0.79	)	$	(0.15	)	$	(0.98	)

Weighted average number of common shares outstanding:
Basic		73.3			72.2			73.0			71.9
Diluted		73.3			72.2			73.0			71.9

	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	September 30,						September 30,						June 30,						June 30,
	2017			2016			2017			2016			2021			2020			2021			2020
Net (loss) earnings	$	(7.8	)	$	(6.8	)	$	19.1		$	19.0
Net loss													$	(9.2	)	$	(57.2	)	$	(10.3	)	$	(70.1	)

Other comprehensive income (loss), net of tax (Note 12):
Translation adjustments		17.7			(4.4	)		46.8			(9.0	)		10.0			6.8			(0.2	)		(13.2	)
Adjustment for available-for-sale securities		(1.8	)		—			(119.3	)		—
Adjustment for net periodic pension and postretirement benefits plan cost		0.7			(19.4	)		2.1			(13.3	)
Adjustments for net periodic pension and postretirement benefits plan cost														1.0			0.7			2.1			1.5
Changes in fair value of derivatives														6.5			(1.3	)		9.0			(13.3	)
Other comprehensive income (loss)		16.6			(23.8	)		(70.4	)		(22.3	)		17.5			6.2			10.9			(25.0	)
Comprehensive income (loss)		8.8			(30.6	)		(51.3	)		(3.3	)		8.3			(51.0	)		0.6			(95.1	)
Less: comprehensive income attributable to noncontrolling interests		0.3			0.3			1.1			1.0
Less: comprehensive income (loss) attributable to non-controlling interests														0.3			—			0.3			(0.1	)
Comprehensive income (loss) attributable to RRD common stockholders	$	8.5		$	(30.9	)	$	(52.4	)	$	(4.3	)	$	8.0		$	(51.0	)	$	0.3		$	(95.0	)

Nine Months Ended

September 30,

2017

2016

OPERATING ACTIVITIES

Net earnings

$
19.1

$
19.0

Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:

Impairment charges - net

21.8

0.8

Depreciation and amortization

143.1

312.5

Provision for doubtful accounts receivable

1.7

20.4

Share-based compensation

6.4

13.4

Deferred income taxes

(10.1
)

(33.5
)
Changes in uncertain tax positions

0.7

(0.4
)
Gain on investments and other assets - net

(2.8
)

(13.0
)
Realized gain on disposition of available-for-sale securities - net

(42.4
)

—

Loss on debt extinguishments

20.1

85.3

Net pension and other postretirement benefits plan income

(11.0
)

(55.1
)
Net loss on pension and other postretirement benefits plan settlements and curtailments (Note 8)

—

78.8

Other

14.7

9.6

Changes in operating assets and liabilities - net of dispositions and acquisitions:

Accounts receivable - net

(26.3
)

(122.4
)
Inventories

(62.5
)

(60.0
)
Prepaid expenses and other current assets

(6.3
)

(9.2
)
Accounts payable

(18.9
)

(160.8
)
Income taxes payable and receivable

(11.4
)

(35.6
)
Accrued liabilities and other

(36.1
)

(23.4
)
Pension and other postretirement benefits plan contributions

(12.4
)

(18.6
)
Net cash (used in) provided by operating activities

(12.6
)

7.8

INVESTING ACTIVITIES

Capital expenditures

(77.2
)

(147.9
)
Acquisitions of businesses, net of cash acquired

—

(47.5
)
Disposition of businesses

—

13.7

Proceeds from sales of investments and other assets

127.6

3.7

Transfers (to) from restricted cash

(2.4
)

13.7

Other investing activities

—

(3.6
)
Net cash provided by (used in) investing activities

48.0

(167.9
)
FINANCING ACTIVITIES

Net change in short-term debt

10.2

5.7

Payments of current maturities and long-term debt

(200.9
)

(786.6
)
Proceeds from issuances of long-term debt

—

1,164.0

Payments on Credit Agreement borrowings

(1,000.0
)

—

Proceeds from Credit Agreement borrowings

1,165.0

—

Proceeds from termination of interest rate swaps

—

2.5

Debt issuance costs

(4.4
)

(37.5
)
Dividends paid

(29.4
)

(163.2
)
Net transfer of cash and cash equivalents to LSC and Donnelley Financial

(78.0
)

—

Other financing activities

(1.6
)

2.5

Net cash (used in) provided by financing activities

(139.1
)

187.4

Effect of exchange rate on cash and cash equivalents

12.0

(5.1
)
Net (decrease) increase in cash and cash equivalents

(91.7
)

22.2

Cash and cash equivalents at beginning of year

317.5

389.6

Cash and cash equivalents at end of period

$
225.8

$
411.8

SUPPLEMENTAL NON-CASH DISCLOSURE:

Assumption of warehousing equipment related to customer contract

$
—

$
8.8

Debt-for-equity exchange

132.9

—

Debt-for-debt exchanges, including debt issuance costs of $5.5 million in 2016

—

300.0

	Six Months Ended
	June 30,
	2021			2020
OPERATING ACTIVITIES
Net loss	$	(10.3	)	$	(70.1	)
Adjustments to reconcile net loss to net cash used in operating activities:
Impairment charges and other-net		1.4			20.8
Depreciation and amortization		66.7			79.0
(Benefit) provision for credit losses		(3.2	)		5.9
Share-based compensation		2.6			3.2
Deferred income taxes		4.9			(3.1	)
Net pension and other postretirement benefits plan income		(9.4	)		(6.7	)
(Gain) loss on disposition of businesses and other assets		(4.2	)		9.4
Loss on debt extinguishment		6.2			0.2
Other		5.9			1.1
Changes in operating assets and liabilities:
Accounts receivable-net		86.2			174.6
Inventories		(45.7	)		(9.1	)
Prepaid expenses and other current assets		(11.8	)		(4.0	)
Accounts payable		(76.5	)		(188.6	)
Current income taxes		(29.1	)		(4.8	)
Accrued liabilities and other		(45.9	)		(47.8	)
Pension and other postretirement benefits plan contributions		(2.6	)		(4.2	)
Net cash used in operating activities		(64.8	)		(44.2	)
INVESTING ACTIVITIES
Capital expenditures		(29.9	)		(38.1	)
Disposition of businesses		(1.4	)		16.1
Proceeds from sales of property, plant and equipment		7.5			4.7
Proceeds related to company-owned life insurance		0.1			3.1
Net cash used in investing activities		(23.7	)		(14.2	)
FINANCING ACTIVITIES
Payments of current maturities and long-term debt		(444.6	)		(152.7	)
Proceeds from issuances of long-term debt		451.1			—
Proceeds from credit facility borrowings		578.0			578.0
Payments on credit facility borrowings		(548.0	)		(210.0	)
Debt issuance costs		(7.6	)		—
Dividends paid		—			(2.1	)
Payments of withholding taxes on share-based compensation		(2.5	)		(0.6	)
Other financing activities		(1.2	)		(1.5	)
Net cash provided by financing activities		25.2			211.1
Effect of exchange rate on cash, cash equivalents and restricted cash		1.9			(4.3	)
Net (decrease) increase in cash, cash equivalents and restricted cash		(61.4	)		148.4
Cash, cash equivalents and restricted cash at beginning of year		357.6			223.8
Cash, cash equivalents and restricted cash at end of period	$	296.2		$	372.2

The accompanying unaudited condensed consolidated interim financial statements include the accounts of R.R. Donnelley & Sons Company and its subsidiaries ~~(the “Company” or “RRD”~~(“RRD,” the “Company,” “we,” “us,” and “our”) and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These unaudited condensed consolidated interim financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods and should be read in conjunction with the consolidated financial statements and the related notes thereto included in ~~the Company’s~~our latest Annual Report on Form 10-K for the year ended December 31, ~~2016~~2020 filed with the SEC on February ~~28, 2017.~~24, 2021. Operating results for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 are not ~~necessarily~~ indicative of the results that may be expected for the fiscal year ending December 31, ~~2017.~~2021. All significant intercompany transactions have been eliminated in consolidation. These unaudited condensed consolidated interim financial statements include estimates and assumptions of management that affect the amounts reported in the condensed consolidated financial statements. Actual results could differ from these estimates.

~~On October 1, 2016,~~In 2020, to focus on our core product and service offerings, we completed our plan to exit our Logistics Business. This business included Print Logistics, which was disposed of on July 2, 2018; Courier Logistics, which was disposed of on March 2, 2020; DLS Worldwide, which was disposed of November 2, 2020; and International Logistics which was disposed of on November 3, 2020. These businesses were included in the ~~Company completed~~Business Services segment and primarily provided logistics services to a broad range of clients in the ~~separation of its financial communications~~United States and data services business (“Donnelley Financial Solutions, Inc.” or “Donnelley Financial”) and the publishing and retail-centric print services and office products business (“LSC Communications, Inc.” or “LSC”) into two separate publicly-traded companies (the "Separation").globally. The Company completed the tax-free distribution of 80.75% of the outstanding common stock of each Donnelley Financial and LSC to the Company’s stockholders of record on September 23, 2016 who received one share of each Donnelley Financial and LSC for every eight shares of RRD common stock owned as of the record date (the “Distribution”). The Company retained 19.25% of the outstanding common stock of each Donnelley Financial and LSC. The historical financial results of ~~Donnelley Financial and LSC prior to the Separation, are presented as discontinued operations on the Condensed Consolidated Statements of Operations and, as such,~~these businesses have been excluded from ~~both~~ continuing operations and segment results for all periods ~~presented.~~ ~~Sales~~presented unless otherwise noted. Refer to Note 2 –Discontinued Operations to our Condensed Consolidated Financial Statements for additional information.

The following table provides a reconciliation of cash, cash equivalents and restricted cash at June 30, 2021 and December 31, 2020 reported within the Condensed Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Condensed Consolidated Statement of Cash Flows.

Cash payments for income taxes were $26.3 million and $14.0 million for the six months ended June 30, 2021 and 2020, respectively. Cash refunds for income taxes were $0.6 million and $2.6 million for the six months ended June 30, 2021 and 2020, respectively. Income taxes receivable of $35.9 million and $16.3 million as of June 30, 2021 and December 31, 2020, respectively, are included within Prepaid expenses and other current assets.

In the fourth quarter of 2020, we completed our plan to exit our Logistics business, which was a component of the Business Services reporting segment. The Logistics business was comprised of DLS Worldwide, International Logistics, Print Logistics and Courier Logistics. In November 2020, we sold our DLS Worldwide and International Logistics businesses as part of our strategic shift to exit non-core businesses in order to pursue portfolio optimization and to reduce debt. As part of this strategic shift, we previously sold Print Logistics in July 2018 and Courier Logistics in March 2020. During the six months ended June 30, 2021, we finalized working capital adjustments and settled certain other contingencies related to the divested businesses, the impact of which is included in the Gain on sale of the discontinued operations, net of tax.

As part of the divestitures, we entered into transition services agreements with the buyers to assist them in the transition of certain functions, including, but not limited to, information technology, finance, and human resources. Further, we entered into several commercial agreements whereby we continue to receive logistics services from the divested business. Our involvement with the divested businesses is not material in the three or six-month periods ended June 30, 2021.

We have reflected the Courier Logistics business, the DLS Worldwide business, and the International Logistics business, as discontinued operations for all periods presented in the Condensed Consolidated Statements of Operations.

Results of discontinued operations for the three and six months ended June 30, 2020 were as follows:

Net sales includes sales from the Logistics businesses to RRD ~~to Donnelley Financial and LSC~~which were previously eliminated in consolidation and have been recast and are now shown as external sales within the financial results of ~~continuing operations.~~discontinued operations above. These net sales were ~~$72.5~~$10.6 million and ~~$150.4~~$22.8 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2016, respectively.~~ ~~Unless indicated otherwise, the information~~2020, respectively.

Restructuring, impairment, and other expenses included $20.6 million of non-cash charges related to impairment of goodwill recorded in the Notes to Condensed Consolidated Financial Statements relates to the Company's continuing operations. Prior periods have been recast to reflect the Company's current segment reporting structure. See Note 2, ~~Discontinued Operations, for more information on the Separation.~~

Immediately following the Distribution on October 1, 2016, the Company affected a one-for-three reverse stock split for RRD common stock (the “Reverse Stock Split”). The Reverse Stock Split was approved by the Company’s Board of Directors on September 14, 2016 and previously approved by the Company’s stockholders at the annual meeting on May 19, 2016. As a result of the Reverse Stock Split, the number of issued and outstanding and treasury shares of the Company’s common stock was reduced proportionally based on the Reverse Stock Split ratio of one share for every three shares of common stock held before the Reverse Stock Split.six months ended June 30, 2020.

~~R.R. DONNELLEY & SONS COMPANY AND SUBSIDIARIES (“RRD”)~~3. Revenue Recognition

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~Disaggregation of Revenue

During the third quarter of 2017, the Company identified an error in the accounting for certain contracts with an inventory buy-back option within the Asia reporting unit, which is in the International segment. As a result, the error, which was determined by management to be immaterial to the previously issued financial statements, has been corrected herein from the amounts previously reported. There was no impact to net earnings (loss) or net earnings (loss) per share, or the Consolidated Statements of Comprehensive Income or Stockholders’ Equity. The following table presents ~~the impact of the revision on~~ net sales disaggregated by products and ~~cost~~services:

Certain clients may receive volume-based rebates or early payment discounts, which are accounted for as variable consideration. We estimate these amounts based on the expected amount to be earned by our clients and reduce revenue accordingly. We do not expect significant changes to estimates of ~~sales:~~ variable consideration. Given the nature of our products and the history of returns, product returns are not significant.

As Reported

Adjustments

As Revised

Three months ended March 31, 2016

Products net sales
$
1,242.7

$
13.1

$
1,229.6

Total net sales

1,645.6

13.1

1,632.5

Products cost of sales

971.9

13.1

958.8

Total cost of sales

1,313.1

13.1

1,300.0

Three months ended June 30, 2016

Products net sales
$
1,231.7

$
16.6

$
1,215.1

Total net sales

1,632.6

16.6

1,616.0

Products cost of sales

985.2

16.6

968.6

Total cost of sales

1,316.2

16.6

1,299.6

Three months ended September 30, 2016

Products net sales
$
1,343.4

$
15.6

$
1,327.8

Total net sales

1,741.2

15.6

1,725.6

Products cost of sales

1,046.3

15.6

1,030.7

Total cost of sales

1,377.0

15.6

1,361.4

Three months ended December 31, 2016

Products net sales
$
1,470.3

$
17.4

$
1,452.9

Total net sales

1,876.3

17.4

1,858.9

Products cost of sales

1,161.0

17.4

1,143.6

Total cost of sales

1,512.6

17.4

1,495.2

Three months ended March 31, 2017

Products net sales
$
1,288.9

$
17.4

$
1,271.5

Total net sales

1,676.3

17.4

1,658.9

Products cost of sales

1,024.3

17.4

1,006.9

Total cost of sales

1,348.5

17.4

1,331.1

Three months ended June 30, 2017

Products net sales
$
1,263.4

$
26.0

$
1,237.4

Total net sales

1,646.0

26.0

1,620.0

Products cost of sales

1,020.7

26.0

994.7

Total cost of sales

1,342.9

26.0

1,316.9

The following table ~~presents the impact of the related balance sheet revision on the December 31, 2016 Condensed Consolidated Balance Sheet:~~

~~The September 30, 2016 Consolidated Statement of Cash Flows has also been revised to reflect the impact of the above balance sheet revision.~~

Immediately following the Distribution, the Company held approximately 6.2 million shares of Donnelley Financial common stock and approximately 6.2 million shares of LSC common stock. The Company accounted for these investments as available-for-sale equity securities. In March 2017, the Company sold the 6.2 million shares of LSC common stock it retained upon spinoff for net proceeds of $121.4 million, resulting in a realized loss of $51.6 million, which was recorded within investment and other income-net in the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2017. In June 2017, the Company completed a non-cash debt-for-equity exchange in which RRD exchanged 6,143,208 of its retained shares of Donnelley Financial common stock for the extinguishment of $111.6 million in aggregate principal amount of RRD indebtedness. In August 2017, the Company disposed of its remaining 99,594 shares of Donnelley Financial common stock in exchange for the extinguishment of $1.9 million in aggregate principal amount of RRD indebtedness. See Note 15, ~~Debt, for additional details of these debt-for-equity transactions. As of September 30, 2017, the Company no longer held any shares of LSC or Donnelley Financial.~~

~~The significant non-cash items and capital expenditures of discontinued operations were as follows:~~

~~In connection with~~Contract liabilities primarily relate to client advances received prior to completion of performance obligations. Reductions in contract liabilities are a result of our completion of performance obligations.

Revenue recognized during the Separation, the Company entered into transition services agreements with Donnelley Financial and LSC under which the companies will provide one another with certain services to help ensure an orderly transition following the Separation (the “Transition Services Agreements”). The charges for these services are intended to allow the companies, as applicable, to recover the direct and indirect costs incurredsix months ended June 30, 2021 from amounts included in ~~providing such services. The Transition Services Agreements generally provide for a term of services starting~~contract liabilities at the Separation date and continuing for a period of up to twenty-four months following the Separation. During the three and nine months ended September 30, 2017, the Company recognized $1.4 million and $6.4 million, respectively, as a reduction of costs within selling, general and administrative expenses within the Condensed Consolidated Statements of Operations from the Transition Services Agreement.

The Company also entered into various commercial agreements which govern sales transactions between the companies. Under these commercial agreements, the Company recognized the following transactions with LSC and Donnelley Financial during the three and nine months ended September 30, 2017:

~~The Company also recognized $83.0~~ ~~million of net cash inflow from Donnelley Financial and LSC within operating activities in the Condensed Consolidated Statements of Cash Flows during the nine months ended~~ S~~eptember 30, 2017.~~

On August 4, 2016, the Company acquired Precision Dialogue Holdings, LLC (“Precision Dialogue”), a provider of email marketing, direct mail marketing and other services with operations in the United States for a purchase price, net of cash acquired, of approximately $59.2 million. The acquisition expanded the Company’s ability to help its customers measure communications effectiveness and audience engagement. ~~During the three and nine months ended September 30, 2017,~~ Precision Dialogue contributed $17.0 million and $44.5 million, respectively, in net sales and earnings before income taxes of $2.9 million and $4.4 million, respectively. During both the three and nine months ended September 30, 2016, Precision Dialogue contributed $8.4 million in net sales and earnings before income taxes of $0.6 million. Precision Dialogue is ~~included within the operating results~~beginning of the ~~Variable Print and Strategic Services segments.~~

O~~n January 11, 2016, the Company sold two entities within the business process outsourcing reporting unit for net proceeds of $13.4~~period was approximately $11.5 million. This resulted in a net gain of $12.3 million during the nine months ended September 30, 2016, which was recorded in other operating income in the Condensed Consolidated Statements of Operations. Additionally, in the third quarter of 2016, the Company sold three immaterial entities in the International segment, which resulted in a net loss of $0.3 million during the three and nine months ended September 30, 2016.

The components of ~~the Company’s~~ inventories, net of excess and obsolescence reserves for raw materials and finished goods, at ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016~~2020 were as follows:

The components of ~~the Company’s~~ property, plant and equipment at ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016~~2020 were as follows:

During the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2021 depreciation expense was ~~$34.6~~$22.6 million and ~~$105.2~~$46.0 million, respectively. During the three and ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2020 depreciation expense was ~~$37.6~~$25.4 million and ~~$116.2~~$53.6 million, respectively.

During the fourth quarter of 2017, we entered into an agreement to sell a printing facility in Shenzhen, China and transfer the related land use rights. As of June 30, 2021, we have received deposits in accordance with the terms of the agreement of approximately $123.3 million which are recorded in other noncurrent liabilities on the Condensed Consolidated Balance Sheets. As of June 30, 2021, the carrying value of the building and land use rights is recorded in other noncurrent assets and is not material. In accordance with the agreement, additional scheduled deposits are required to be paid to us with the final payment due in 2022. The closing date of the final sales transaction is uncertain at this time due to the uncertainty around the timing of the regulatory process including government approvals. Gross proceeds from the sale are expected to be approximately $250.0 million, subject to changes in the exchange rate. If the buyer fails to comply with terms of the agreement or terminates for any reason, the Company is entitled to retain 30% of the purchase price as liquidated damages.

The ~~changes in the~~ carrying amount of goodwill ~~for the nine months ended September~~at June 30, ~~2017~~2021 and December 31, 2020 were as follows:

	Variable			Strategic									Business Services			Marketing Solutions			Total
	Print			Services			International			Total
Net book value as of December 31, 2016
Net book value as of December 31, 2020
Goodwill	$	1,823.0		$	365.2		$	1,017.9		$	3,206.1		$	2,076.1		$	519.5		$	2,595.6
Accumulated impairment losses		(1,550.5	)		(148.7	)		(904.9	)		(2,604.1	)		(1,930.9	)		(254.1	)		(2,185.0	)
Total		272.5			216.5			113.0			602.0			145.2			265.4			410.6
Foreign exchange and other adjustments		—			—			6.9			6.9
Impairment charges		—			(21.3	)		—			(21.3	)
Net book value as of September 30, 2017
Foreign exchange														(2.2	)		—			(2.2	)
Net book value as of June 30, 2021
Goodwill		1,824.1			365.2			1,090.3			3,279.6			2,080.1			519.5			2,599.6
Accumulated impairment losses		(1,551.6	)		(170.0	)		(970.4	)		(2,692.0	)		(1,937.1	)		(254.1	)		(2,191.2	)
Total	$	272.5		$	195.2		$	119.9		$	587.6		$	143.0		$	265.4		$	408.4

~~During the third quarter of 2017, the Company recorded non-cash charges of $21.3 million to reflect the impairment of goodwill in the Strategic Services segment. See Note 7,~~ ~~Restructuring, Impairment and Other Charges, for further information.~~

The components of other intangible assets at ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016~~2020 were as follows:

	September 30, 2017							December 31, 2016							June 30, 2021							December 31, 2020
	Gross							Gross							Gross							Gross
	Carrying		Accumulated			Net Book		Carrying		Accumulated			Net Book		Carrying		Accumulated			Net Book		Carrying		Accumulated			Net Book
	Amount		Amortization			Value		Amount		Amortization			Value		Amount		Amortization			Value		Amount		Amortization			Value

Customer relationships	$	532.9	$	(404.8	)	$	128.1	$	517.9	$	(370.7	)	$	147.2
Client relationships															$	414.7	$	(367.3	)	$	47.4	$	417.0	$	(361.1	)	$	55.9
Trade names																28.5		(16.7	)		11.8		29.1		(16.2	)		12.9
Trademarks, licenses and agreements																23.2		(23.2	)		—		23.2		(23.2	)		—
Patents		2.0		(2.0	)		—		2.0		(2.0	)		—		2.0		(2.0	)		—		2.0		(2.0	)		—
Trademarks, licenses and agreements		26.2		(24.9	)		1.3		26.2		(24.4	)		1.8
Trade names		36.8		(15.7	)		21.1		36.8		(13.9	)		22.9
Total other intangible assets	$	597.9	$	(447.4	)	$	150.5	$	582.9	$	(411.0	)	$	171.9
Total amortizable other intangible assets																468.4		(409.2	)		59.2		471.3		(402.5	)		68.8

Amortization expense for other intangible assets was ~~$7.1~~$4.8 million and ~~$21.6~~$9.5 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017, respectively. Amortization expense for other intangible assets~~2021 and was ~~$8.0~~$4.8 million and ~~$25.7~~$9.7 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2016, respectively.~~

~~Restructuring, Impairment and Other Charges Recognized in Results of Operations~~

For the three and six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016, the Company~~2020, we recorded the following net restructuring, impairment and other ~~charges:~~ expenses:

~~For the nine months ended September 30, 2017 and 2016, the Company recorded the following net restructuring, impairment and other charges:~~

Nine Months Ended

Employee

Other
Restructuring

Total
Restructuring

Other

September 30, 2016

Terminations

Charges

Charges

Impairment

Charges

Total

Variable Print

$
1.5

$
1.5

$
3.0

$
0.3

$
1.4

$
4.7

Strategic Services

1.7

—

1.7

—

0.3

2.0

International

7.4

1.3

8.7

(2.5
)

—

6.2

Corporate

10.1

0.1

10.2

1.2

—

11.4

Total

$
20.7

$
2.9

$
23.6

$
(1.0
)

$
1.7

$
24.3

	Six Months Ended
	June 30, 2021
	Employee		Other Restructuring		Multi-Employer Pension Plan			Impairment and
	Terminations		Charges		Charges			Other			Total
Business Services	$	1.4	$	4.6	$	1.2		$	(0.5	)	$	6.7
Marketing Solutions		0.5		3.5		0.2			0.5			4.7
Corporate		1.9		3.5		(1.3	)		—			4.1
Total	$	3.8	$	11.6	$	0.1		$	—		$	15.5

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017, the Company~~2021, we recorded net restructuring charges of ~~$10.7~~$2.3 million and ~~$19.5~~$3.8 million ~~respectively,~~ for employee termination costs. These charges primarily relate to announced facility closures and the reorganization of selling, general and administrative functions ~~primarily within the Corporate, International~~across each segment. We also incurred $7.6 million and ~~Variable Print segments, the termination~~$11.6 million of ~~the Company’s relationship in a joint venture within the International segment and a facility closure in the Strategic Services segment. For~~other restructuring charges during the three and ~~nine~~six months ended ~~September~~June 30, ~~2017, the Company~~2021, comprised of lease terminations and environmental costs. We recorded net ~~impairment charges~~gains of ~~$21.5~~$1.8 million and ~~$21.7~~$1.4 million ~~respectively, primarily related to~~on the ~~$21.3 million impairment~~sale of the goodwill for the digital and creative solutions (“DCS”) reporting unit, which is included within the Strategic Services segment. The goodwill impairment charge in the DCS reporting unit was due to the notification from a major customer that they will be transitioning their business away from DCS beginning in the fourth quarter of 2017 as well as declines in sales with other existing customers which resulted in lower expectations of future revenues, profitability and cash flows compared to expectations as of the October 31, 2016 annual goodwill impairment test. As of September 30, 2017, the DCS reporting unit had no remaining goodwill. The goodwill impairment charges were determined using Level 3 inputs, including comparable marketplace fair value data and a ~~discounted cash flow analysis. The remaining impairment charges recorded~~restructured facilities for the three and ~~nine~~six months ended ~~September~~June 30, 2017, were primarily due to the impairment of equipment associated with the facility closure in the Strategic Services segment. Additionally, the Company incurred lease termination and other restructuring charges of $1.1 million and $3.8 million, respectively, for the three and nine months ended September 30, 2017.2021.

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2016, the Company~~2020, we recorded net restructuring charges of ~~$9.7~~$12.8 million and ~~$20.7~~$20.9 million ~~respectively,~~ for employee termination costs. These charges primarily related to ~~two~~the closure of the Chilean operations and other facility closures in the ~~International~~Business Services segment and the reorganization of ~~certain~~selling, general and administrative functions ~~and operations. Additionally, the Company~~across each segment. We also incurred ~~lease termination and~~ other restructuring charges of ~~$0.6~~$14.0 million and ~~$2.9~~$18.1 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2016, respectively. For the three~~2020 and ~~nine months ended September 30, 2016, the Company recognized $0.1~~recorded a net loss of $0.2 million and ~~$1.0~~a net gain of $1.5 million ~~respectively, of net gains~~ on the sale of ~~previously impaired assets, partially offset by impairment charges related to buildings and machinery and equipment associated with facility closures.~~

~~For~~restructured facilities for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020.

Restructuring and MEPP reserves as of December 31, 2020 and June 30, 2021, and changes during the ~~Company recorded~~six months ended June 30, 2021, were as follows:

The current portion of restructuring reserves of $24.3 million at June 30, 2021 was included in Accrued liabilities and other ~~charges~~while the long-term portion of ~~$0.5~~$45.2 million, ~~and $1.7 million and $0.6 million and $1.7 million, respectively, for multi-employer pension plan~~primarily related to MEPP withdrawal obligations, ~~unrelated to facility closures.~~employee terminations in litigation and other, was included in Other noncurrent liabilities at June 30, 2021. The ~~total~~ liabilities for the withdrawal obligations associated with ~~the Company’s~~our previous decision to withdraw from ~~multi-employer pension plans~~all MEPPs included in ~~accrued~~Accrued liabilities and other and Other noncurrent liabilities are ~~$5.1~~$6.9 million and ~~$32.4~~$41.9 million, respectively, as of ~~September~~June 30, ~~2017~~2021.

The Company’s multi-employer pension plan withdrawal liabilities could be affected by the financial stability of other employers participating in the plans and any decisions by those employers to withdraw from the plans in the future. While it is not possible to quantify the potential impact of future events or circumstances, reductions in other employers’ participation in multi-employer pension plans, including certain plans from which the Company has previously withdrawn, could have a material impact on the Company’s previously estimated withdrawal liabilities, consolidated results of operations, financial position or cash flows.

~~The restructuring reserve as of December 31, 2016 and September 30, 2017, and changes during the nine months ended September 30, 2017, were as follows:~~

The current portion of restructuring reserves of $14.4 million at September 30, 2017 was included in accrued liabilities, while the long-term portion of $13.6 million, primarily related to multi-employer pension plan withdrawal obligations related to facility closures, was included in other noncurrent liabilities at September 30, 2017.

~~The Company anticipates that payments associated with the employee terminations reflected in the above table will be substantially completed by September 2018.~~

Payments on ~~all of the Company’s multi-employer pension plan~~our MEPP withdrawal obligations are scheduled to be substantially completed by ~~2036.~~2034. Changes based on uncertainties in these estimated withdrawal obligations could affect the ultimate charges related to ~~multi-employer pension plan~~MEPP withdrawals. Refer to Note 14 – Commitment and Contingencies to our Condensed Consolidated Financial Statements for further details.

The restructuring liabilities classified as ~~“lease terminations and other”~~“other” primarily consisted of ~~lease terminations, other facility closing costs~~reserves for employee termination litigation and contract termination costs. Payments on certain of the lease obligations are scheduled to continue until 2020. Market conditions and the Company’s ability to sublease these properties could affect the ultimate charges related to the lease obligations.environmental matters. Any potential recoveries or additional charges could affect amounts reported in ~~the Company’s~~our condensed consolidated financial statements.

~~The components~~Components of ~~the estimated~~ net pension and other postretirement benefits plan (“OPEB”) income for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016~~2020 were as follows:

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Pension (income) expense

Service cost
$
0.1

$
0.3

$
0.5

$
0.8

Interest cost

8.0

37.9

23.7

105.3

Expected return on plan assets

(12.7
)

(58.2
)

(37.6
)

(171.2
)
Amortization, net

1.9

7.6

5.4

23.4

Settlements and curtailments

—

1.6

—

98.0

Less: income (expense) attributable to discontinued operations

—

10.2

—

(43.3
)
Net pension (income) expense - continuing operations
$
(2.7
)

$
(0.6
)

$
(8.0
)

$
13.0

Other postretirement benefits plan income

Service cost
$
0.4

$
1.0

$
1.0

$
3.0

Interest cost

2.7

3.1

8.3

9.2

Expected return on plan assets

(3.4
)

(3.4
)

(10.1
)

(10.2
)
Amortization, net

(0.7
)

(4.0
)

(2.2
)

(12.0
)
Curtailments

—

(19.7
)

—

(19.7
)
Net other postretirement benefit income - continuing operations
$
(1.0
)

$
(23.0
)

$
(3.0
)

$
(29.7
)

The Company expects to make cash contributions of approximately $17.0 million to its pension and other postretirement benefit plans in 2017. During the nine months ended September 30, 2017, the Company contributed $12.4 million to its benefit plans.

In the fourth quarter of 2015, the Company communicated to certain former employees the option to receive a lump-sum pension payment or annuity with payments computed in accordance with statutory requirements, beginning in the second quarter of 2016. Payments to eligible participants who elected to receive a lump-sum pension payment or annuity were funded from existing pension plan assets and liabilities were remeasured as of the payout date. The discount rates and actuarial assumptions used to calculate the payouts were determined in accordance with federal regulations. The company recorded total non-cash settlement charges of $1.6 million and $98.0 million, of which $0.3 million and $20.7 million is included within selling, general and administrative expenses and $1.3 million and $77.3 million is included within income from discontinued operations, net of tax in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2016, respectively. These charges resulted from the recognition in earnings of a portion of the actuarial losses recorded in accumulated other comprehensive loss based on the proportion of the obligation settled.

During the third quarter of 2016, the Company announced the discontinuation of retiree medical, prescription drug and life insurance benefits for individuals retiring on or after October 1, 2016. This change was accounted for as a significant plan amendment and the other postemployment benefit plan obligations were remeasured as of September 30, 2016. This remeasurement resulted in a curtailment gain of $16.4 million within cost of sales and $3.3 million in selling, general and administrative expenses during the three and ninesix months ended ~~September~~June 30, ~~2016.~~

2021 and 2020, we contributed $2.6 million and $4.2 million, respectively, to our retirement plans.

Share-based compensation expense from continuing operations totaled $2.1 million for both the three months ended September 30, 2017 and 2016, respectively, and $6.4 million and $7.9 million for the nine months ended September 30, 2017 and 2016, respectively.

In March ~~2017, the Company~~2021, we awarded ~~its~~our annual share-based compensation grants, which consisted of ~~569,594~~0.8 million restricted stock units with a grant date fair value of ~~$16.30~~$4.52 per unit and ~~304,425~~0.8 million performance share units also with a grant date fair value of ~~$16.30~~$4.52 per unit. The restricted stock units are subject to a three year ~~graded~~ratable vesting ~~period. The~~period and the performance share units are subject to a ~~34 month cliff vesting~~three year performance period. ~~Additionally, during the nine months ended September~~Dividends are 0t paid on restricted stock units. As of June 30, ~~2017, the Company awarded 102,191~~2021, there were 1.5 million and 2.2 million outstanding restricted shares and performance restricted shares, respectively.

In addition, in March 2021 we granted 0.9 million cash-settled restricted stock units ~~with~~(“phantom restricted stock units”) and 0.9 million cash-settled performance stock units (“phantom performance stock units”). Our share price on the date of grant was $4.52. The phantom restricted stock units vest and are payable in three equal installments over a ~~weighted average~~period of three years after the grant ~~date~~date. The phantom performance stock units are subject to a three year performance period. Phantom stock units are not shares of our common stock and therefore the recipients of these awards do not receive ownership interest in the Company or stockholder voting rights. Phantom stock unit awards are subject to forfeiture upon termination of employment prior to vesting, subject in some cases to early vesting upon specified events, including death or permanent disability of the grantee, termination of the grantee’s employment under certain circumstances or a change in control of the Company. All phantom stock unit awards are classified as liability awards due to their expected settlement in cash and are included in Accrued liabilities and other in the Condensed Consolidated Balance Sheets. Compensation expense for these awards is measured based upon the fair value of ~~$11.77 per share~~the awards at the end of each reporting period. Dividends are 0t paid on phantom stock units. As of June 30, 2021, there were 2.1 million and ~~a weighted average vesting period of 1.5 years.~~2.4 million outstanding cash-settled phantom and performance cash-settled phantom shares, respectively.

Compensation expense for these plans was $9.4 million and $16.2 million for the three and six months ended June 30, 2021 and $2.8 million and $3.1 million for the three and six months ended June 30, 2020, respectively.

~~The Company’s~~Our equity as of December 31, ~~2016~~2020 and ~~September~~June 30, ~~2017,~~2021, and changes during the ~~nine~~three and six months ended ~~September~~June 30, ~~2017,~~2021, were as follows:

RRD

Stockholders'

Noncontrolling

Equity

Interest

Total Equity

Balance at December 31, 2016

$
(105.7
)

$
13.5

$
(92.2
)
Net earnings

18.4

0.7

19.1

Other comprehensive (loss) income

(70.8
)

0.4

(70.4
)
Share-based compensation

6.4

—

6.4

Spinoff adjustments

5.9

—

5.9

Issuance of share-based awards, net of withholdings and other

(1.7
)

—

(1.7
)
Cash dividends paid

(29.4
)

—

(29.4
)
Distributions to noncontrolling interests

—

(0.7
)

(0.7
)
Balance at September 30, 2017

$
(176.9
)

$
13.9

$
(163.0
)

	Common		Additional Paid-in-			Treasury			Accumulated			Accumulated Other Comprehensive			Total RRD's Stockholders'			Noncontrolling			Total
	Stock		Capital			Stock			Deficit			Loss			Equity			Interests			Equity
Balance at December 31, 2020	$	0.9	$	3,263.6		$	(1,127.6	)	$	(2,240.7	)	$	(153.9	)	$	(257.7	)	$	13.9		$	(243.8	)
Net (loss) income										(1.3	)					(1.3	)		0.2			(1.1	)
Other comprehensive loss													(6.4	)		(6.4	)		(0.2	)		(6.6	)
Share-based compensation				0.2												0.2						0.2
Issuance of share-based awards, net of withholdings and other				(158.4	)		156.0									(2.4	)					(2.4	)
Distributions to noncontrolling interests																—			(0.7	)		(0.7	)
Balance at March 31, 2021	$	0.9	$	3,105.4		$	(971.6	)	$	(2,242.0	)	$	(160.3	)	$	(267.6	)	$	13.2		$	(254.4	)
Net (loss) income										(9.4	)					(9.4	)		0.2			(9.2	)
Other comprehensive income													17.4			17.4			0.1			17.5
Share-based compensation				2.4												2.4						2.4
Issuance of share-based awards, net of withholdings and other				(77.8	)		77.7									(0.1	)					(0.1	)
Balance at June 30, 2021	$	0.9	$	3,030.0		$	(893.9	)	$	(2,251.4	)	$	(142.9	)	$	(257.3	)	$	13.5		$	(243.8	)

~~During~~On May 17, 2021, our Board of Directors approved an amendment to the ~~nine~~Stockholder Rights Agreement. The amendment raises from 10% to 15% the level of beneficial ownership of RRD common stock the acquisition of which by a person or group (other than certain passive institutional investors) would result in the rights becoming exercisable.

Our equity as of December 31, 2019 and June 30, 2020, and changes during three and six months ended ~~September~~June 30, ~~2017, the Company recorded certain spinoff related adjustments within equity primarily resulting from the final pension asset valuation~~2020, were as ~~required by the Separation and Distribution Agreement.~~follows:

	Common		Additional Paid-in-			Treasury			Accumulated			Accumulated Other Comprehensive			Total RRD's Stockholders'			Noncontrolling			Total
	Stock		Capital			Stock			Deficit			Loss			Equity			Interests			Equity
Balance at December 31, 2019	$	0.9	$	3,348.0		$	(1,219.6	)	$	(2,336.8	)	$	(176.2	)	$	(383.7	)	$	13.4		$	(370.3	)
Net (loss) income										(13.0	)					(13.0	)		0.1			(12.9	)
Other comprehensive income													(31.0	)		(31.0	)		(0.2	)		(31.2	)
Share-based compensation				1.4												1.4						1.4
Issuance of share-based awards, net of withholdings and other				(82.3	)		81.8									(0.5	)					(0.5	)
Cash dividends paid										(2.1	)					(2.1	)					(2.1	)
Cumulative impact of adopting ASU 2016-03, net of tax										(0.3	)					(0.3	)					(0.3	)
Distributions to noncontrolling interests																—			(0.7	)		(0.7	)
Balance at March 31, 2020	$	0.9	$	3,267.1		$	(1,137.8	)	$	(2,352.2	)	$	(207.2	)	$	(429.2	)	$	12.6		$	(416.6	)
Net loss										(57.2	)					(57.2	)					(57.2	)
Other comprehensive income													6.2			6.2						6.2
Share-based compensation				1.8												1.8						1.8
Issuance of share-based awards, net of withholdings and other				(7.7	)		7.6									(0.1	)					(0.1	)
Balance at June 30, 2020	$	0.9	$	3,261.2		$	(1,130.2	)	$	(2,409.4	)	$	(201.0	)	$	(478.5	)	$	12.6		$	(465.9	)

Basic earnings per share is calculated by dividing net earnings attributable to RRD common stockholders by the weighted average number of common shares outstanding for the period. In computing diluted earnings per share, basic earnings per share is adjusted for the assumed issuance of all potentially dilutive share-based awards, including stock options, restricted stock units and performance share units. Performance share units are ~~considered anti-dilutive and~~ excluded if the performance targets upon which the issuance of the shares is contingent have not been achieved and the respective performance period has not been completed as of the end of the current period. Additionally, stock options are considered anti-dilutive when the exercise price exceeds the average market value of ~~the Company’s~~our stock price during the applicable period. In periods when ~~the Company is~~we are in a net loss, ~~from continuing operations,~~ share-based awards are excluded from the calculation of earnings per share as their inclusion would have an anti-dilutive effect.

During the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016, no~~2020, 0 shares of common stock were purchased by ~~the Company;~~us; however, shares were withheld for tax liabilities upon the vesting of equity awards.

The reconciliation of the numerator and denominator of the basic and diluted earnings per share calculation and the anti-dilutive share-based awards for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016 was~~2020 were as follows:

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Basic net (loss) earnings per share attributable to RRD common stockholders:

Continuing operations

$
(0.11
)

$
0.31

$
0.26

$
0.03

Discontinued operations

—

(0.41
)

—

0.23

Net (loss) earnings attributable to RRD stockholders

$
(0.11
)

$
(0.10
)

$
0.26

$
0.26

Diluted net (loss) earnings per share attributable to RRD common stockholders:

Continuing operations

$
(0.11
)

$
0.31

$
0.26

$
0.03

Discontinued operations

—

(0.41
)

—

0.23

Net (loss) earnings attributable to RRD stockholders

$
(0.11
)

$
(0.10
)

$
0.26

$
0.26

Numerator

Net (loss) earnings attributable to RRD common stockholders - continuing operations

$
(8.0
)

$
22.0

$
18.4

$
2.4

Net (loss) earnings from discontinued operations, net of income taxes

—

(29.1
)

—

15.8

Net (loss) earnings attributable to RRD common stockholders

$
(8.0
)

$
(7.1
)

$
18.4

$
18.2

Denominator:

Weighted average number of common shares outstanding

70.2

70.0

70.1

70.0

Dilutive options and awards

—

0.5

0.2

0.5

Diluted weighted average number of common shares outstanding

70.2

70.5

70.3

70.5

Weighted average number of anti-dilutive share-based awards:

Stock options

1.3

0.8

1.0

0.7

Performance share units

0.3

0.2

0.3

0.2

Restricted stock units

1.1

0.3

0.7

—

Total

2.7

1.3

2.0

0.9

Dividends declared per common share

$
0.14

$
0.78

$
0.42

$
2.34

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020				2021			2020
Basic and diluted net (loss) earnings per share attributable to RRD common stockholders:
Continuing operations	$	(0.13	)	$	(0.79	)	$	(0.16	)	$	(0.70	)
Discontinued operations	$	—		$	—		$	0.01		$	(0.28	)
Net loss attributable to RR Donnelley stockholders	$	(0.13	)	$	(0.79	)	$	(0.15	)	$	(0.98	)

Numerator:
Net loss attributable to RRD common stockholders - continuing operations	$	(9.4	)	$	(57.2	)	$	(11.3	)	$	(50.3	)
Net earnings (loss) from discontinued operations, net of income taxes		—			—			0.6			(19.9	)
Net loss attributable to RRD common stockholders	$	(9.4	)	$	(57.2	)	$	(10.7	)	$	(70.2	)

Denominator:
Weighted average number of common shares outstanding - Basic and Diluted		73.3			72.2			73.0			71.9

Weighted average number of anti-dilutive share-based awards:
Stock options		0.2			0.3			0.2			0.3
Restricted stock units		0.6			1.5			0.7			1.1
Total		0.8			1.8			0.9			1.4

Dividends declared per common share	$	—		$	—		$	—		$	0.03

The components of other comprehensive income (loss) and income tax expense (benefit) ~~expense~~ allocated to each component for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016~~2020 were as follows:

	Three Months Ended								Nine Months Ended									Three Months Ended									Six Months Ended
	September 30, 2017								September 30, 2017									June 30, 2020									June 30, 2020
																		Before						Net of			Before						Net of
	Before Tax			Income Tax		Net of Tax			Before Tax			Income Tax			Net of Tax			Tax			Income			Tax			Tax			Income			Tax
	Amount			Expense		Amount			Amount			Expense			Amount			Amount			Tax			Amount			Amount			Tax			Amount
Translation adjustments	$	17.7		$	—	$	17.7		$	46.8		$	—		$	46.8		$	6.8		$	—		$	6.8		$	(13.2	)	$	—		$	(13.2	)
Adjustment for net periodic pension and other postretirement benefits plan cost		1.2			0.5		0.7			3.2			1.1			2.1
Adjustments for available-for-sale securities		(1.8	)		—		(1.8	)		(122.3	)		(3.0	)		(119.3	)
Adjustments for net periodic pension and OPEB cost																			1.0			0.3			0.7			2.0			0.5			1.5
Change in fair value of derivatives																			(1.8	)		(0.5	)		(1.3	)		(17.5	)		(4.2	)		(13.3	)
Other comprehensive income (loss)	$	17.1		$	0.5	$	16.6		$	(72.3	)	$	(1.9	)	$	(70.4	)	$	6.0		$	(0.2	)	$	6.2		$	(28.7	)	$	(3.7	)	$	(25.0	)

During the nine months ended September 30, 2016, translation adjustments and income tax expense on pension and other postretirement benefits plan cost were adjusted to reflect previously recorded deferred taxes at their historical exchange rates.

Accumulated other comprehensive loss by component as of December 31, ~~2016~~2020 and ~~September~~June 30, ~~2017,~~2021, and changes during the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2021, were as follows:

Accumulated other comprehensive loss by component as of December 31, ~~2015~~2019 and ~~September~~June 30, ~~2016,~~2020, and changes during the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2020, were as follows:

Reclassifications from accumulated other comprehensive loss for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016~~2020 were as follows:

Three Months Ended
September 30,

Nine Months Ended
September 30,

Classification in the Condensed Consolidated

2017

2016

2017

2016

Statements of Operations
Translation Adjustments:

Net realized loss
$
2.8

—

$
2.8

—

Selling, general and administrative expenses
Reclassifications before tax

2.8

—

2.8

—

Income tax benefit

—

—

—

—

Reclassification, net of tax
$
2.8

$
—

$
2.8

$
—

Amortization of pension and other postretirement benefits plan cost:

Net actuarial loss
$
1.9

$
7.8

$
5.4

$
23.5

Cost of sales; Selling, general and administrative expenses
Net prior service credit

(0.7
)

(4.0
)

(2.2
)

(12.0
)

Cost of sales; Selling, general and administrative expenses
Settlements

—

1.6

—

98.5

Cost of sales; Selling, general and administrative expenses
Curtailments

—

(19.7
)

—

(19.7
)

Cost of sales; Selling, general and administrative expenses
Reclassifications before tax

1.2

(14.3
)

3.2

90.3

Income tax expense (benefit)

0.5

(7.9
)

1.1

35.1

Reclassification, net of tax
$
0.7

$
(6.4
)

$
2.1

$
55.2

Available-for-sale securities:

Net realized gain on equity securities

(1.8
)

—

(52.8
)

—

Investment and other income-net
Reclassifications before tax

(1.8
)

—

(52.8
)

—

Income tax benefit

—

—

18.0

—

Reclassification, net of tax

(1.8
)

—

(70.8
)

—

Total reclassifications, net of tax
$
1.7

$
(6.4
)

$
(65.9
)

$
55.2

~~The Company’s~~Our segments and their product and service offerings are summarized below:

This segment includes the Company’s U.S. short-run and transactional printing operations. This segment’s primary product offerings include commercial and digital print, direct mail, labels, statement printing, forms and packaging.

~~This segment includes the Company’s logistics services, print management offerings~~Business Services provides customized solutions at scale to help clients inform, service and ~~digital and creative solutions.~~

~~This segment includes the Company’s non-U.S. printing operations in Asia, Latin America, Canada and Europe. This~~transact with their customers. The segment’s primary product and service offerings include commercial print, packaging, ~~books, catalogs, magazines, retail inserts,~~labels, statement printing, ~~commercial~~supply chain management, forms and business process outsourcing. This segment also includes all of our operations in Asia, Europe, Canada and Latin America.

Marketing Solutions leverages an integrated portfolio of data analytics, creative services and multichannel execution to deliver comprehensive, end-to-end solutions. The segment’s primary product and service offerings include direct marketing, in-store marketing, digital print, ~~forms, labels, logistics services, directories,~~kitting, fulfillment, digital and creative solutions and direct mail. Additionally, this segment includes the Company’s business process outsourcing and Global Turnkey Solutions operations. Business process outsourcing provides transactional print and outsourcing services, statement printing, direct mail and print management offerings through its operations in Europe, Asia and North America. Global Turnkey Solutions provides outsourcing capabilities, including product configuration, customized kitting and order fulfillment for technology, medical device and other companies around the world through its operations in Europe, North America and Asia.list services.

~~Corporate consists of unallocated~~Certain selling general and administrative ~~activities~~expenses are not directly attributable to our operating segments and ~~associated~~are therefore reported at Corporate. These expenses ~~including, in part,~~include executive, legal, finance, communications, certain facility costs and ~~LIFO~~last-in-first-out inventory provisions. In addition, certain costs and earnings of employee benefit plans, such as pension and ~~other postretirement benefits plan~~OPEB expense (income) and share-based compensation, are included in Corporate and not allocated to the operating segments. Corporate also manages ~~the Company’s~~our cash pooling structures, which ~~enable~~enables participating international locations to draw on ~~the Company’s overseas~~our international cash resources to meet local liquidity needs.

~~The Company has~~We have disclosed income (loss) from operations as the primary measure of segment earnings (loss). This is the measure of profitability used by ~~the Company’s~~our chief operating decision-maker and is most consistent with the presentation of profitability reported within the Condensed Consolidated Financial Statements.

Income (Loss)

Depreciation

Total

Intersegment

Net

from

and

Capital

Sales

Sales

Sales

Operations

Amortization

Expenditures

Three Months Ended September 30, 2017

Variable Print

$
771.7

$
(4.2
)

$
767.5

$
39.3

$
28.5

$
6.3

Strategic Services

483.5

(39.8
)

443.7

(14.8
)

3.8

(0.2
)
International

532.6

(8.9
)

523.7

20.6

13.7

11.9

Total operating segments

1,787.8

(52.9
)

1,734.9

45.1

46.0

18.0

Corporate

—

—

—

(9.2
)

1.0

5.0

Total operations

$
1,787.8

$
(52.9
)

$
1,734.9

$
35.9

$
47.0

$
23.0

	Three Months Ended
	June 30, 2021

				Income (Loss)	Depreciation
	Total	Intersegment	Net	from	and	Capital
	Sales	Sales	Sales	Operations	Amortization	Expenditures
Business Services	$924.7	$(15.1)	$909.6	$55.2	$22.3	$12.5
Marketing Solutions	241.0	(5.0)	236.0	9.0	8.1	1.6
Total operating segments	1,165.7	(20.1)	1,145.6	64.2	30.4	14.1
Corporate	—	—	—	(36.0)	2.5	2.8
Total operations	$1,165.7	$(20.1)	$1,145.6	$28.2	$32.9	$16.9

	Six Months Ended
	June 30, 2021
															Assets of
								Income (Loss)			Depreciation				Operations
	Total		Intersegment			Net		from			and		Capital		As of
	Sales		Sales			Sales		Operations			Amortization		Expenditures		June 30, 2021
Business Services	$	1,860.7	$	(29.0	)	$	1,831.7	$	108.4		$	45.3	$	20.3	$	2,181.6
Marketing Solutions		496.6		(9.6	)		487.0		22.8			16.1		4.6		630.3
Total operating segments		2,357.3		(38.6	)		2,318.7		131.2			61.4		24.9		2,811.9
Corporate		—		—			—		(77.9	)		5.3		5.0		189.0
Total operations	$	2,357.3	$	(38.6	)	$	2,318.7	$	53.3		$	66.7	$	29.9	$	3,000.9

	Six Months Ended
	June 30, 2020
															Assets of
								Income (Loss)			Depreciation				Operations
	Total		Intersegment			Net		from			and		Capital		As of
	Sales		Sales			Sales		Operations			Amortization		Expenditures		December 31, 2020
Business Services	$	1,714.5	$	(25.8	)	$	1,688.7	$	54.8		$	48.2	$	19.8	$	2,220.9
Marketing Solutions		549.7		(11.9	)		537.8		23.1			26.2		6.4		674.3
Total operating segments		2,264.2		(37.7	)		2,226.5		77.9			74.4		26.2		2,895.2
Corporate		—		—			—		(63.8	)		1.7		11.9		235.7
Total operations	$	2,264.2	$	(37.7	)	$	2,226.5	$	14.1		$	76.1	$	38.1	$	3,130.9

Net restructuring, impairment and other ~~charges~~expenses by segment are described in Note 7, Restructuring, Impairment and Other ~~Charges~~.

~~The Company is~~We are subject to laws and regulations relating to the protection of the environment. ~~The Company provides~~We provide for expenses associated with environmental remediation obligations when such amounts are probable and can be reasonably estimated. Such accruals are adjusted as new information develops or circumstances change and are generally not discounted. ~~The Company has~~We have been designated as a potentially responsible party or ~~has~~have received claims in ~~three~~4 active federal and state Superfund and other multiparty remediation sites. In addition to these sites, ~~the Company~~we may also have the obligation to remediate ~~seven~~6 other previously and currently owned facilities. At the Superfund sites, the Comprehensive Environmental Response, Compensation and Liability Act provides that ~~the Company’s~~our liability could be joint and several, meaning that ~~the Company~~we could be required to pay an amount in excess of ~~its~~our proportionate share of the remediation costs.

~~The Company’s~~Our understanding of the financial strength of other potentially responsible parties at the multiparty sites and of other liable parties at the previously owned facilities has been considered, where appropriate, in the determination of ~~the Company’s~~our estimated liability. ~~The Company established reserves,~~We believe that our recorded accruals, recorded in ~~accrued~~Accrued liabilities and other and Other noncurrent liabilities, ~~that it believes~~ are adequate to cover ~~its~~our share of the potential costs of remediation at each of the multiparty sites and the previously and currently owned facilities. It is not possible to quantify with certainty the potential impact of actions regarding environmental matters, particularly remediation and other compliance efforts that ~~the Company~~we may undertake in the future. However, in ~~the~~our opinion, ~~of management,~~ compliance with the present environmental protection laws, before taking into account estimated recoveries from third parties, will not have a material effect on ~~the Company’s~~our consolidated results of operations, financial position or cash flows.

In April 2019, we received a subpoena from the SEC related to previous business dealings with the Brazilian Ministry of Education. The SEC and Department of Justice (“DOJ”) are investigating the matter, and we are cooperating as they conduct their investigations.

In addition, the Brazil authorities are also investigating the matter and in June 2021 the Company learned that Brazil's Comptroller General of the Union ("CGU") issued an administrative enforcement notice with charges related to previous business dealings between an administrative body of the Brazilian Ministry of Education and the Company's former Brazilian subsidiary, RR Donnelley Editora e Gráfica (“RRD-Brazil”). The administrative enforcement notice forms the basis of an administrative proceeding against the former Brazilian subsidiary (which filed for bankruptcy liquidation in March 2019) and its immediate parent, RR Donnelley Holdings B.V. The Company also is named as a party in this proceeding. The administrative enforcement notice alleges that former employees of RRD-Brazil engaged in anticompetitive and other business misconduct in connection with services provided to the Ministry of Education. We are pursuing our defenses in this matter and analyzing potential courses of action with local legal counsel.

From time to time, ~~the Company’s customers and others~~our clients file voluntary petitions for reorganization under United States bankruptcy laws. In such cases, certain pre-petition payments received by ~~the Company~~us from these parties could be considered preference items and subject to return.

We also regularly investigate matters reported to our whistleblower hotline and are currently investigating matters in certain foreign locations. In addition, ~~the Company~~we may be party to ~~certain~~ litigation arising in the ordinary course of business. ~~Management believes~~

We believe that the final resolution of these preference items, investigations, and litigation will not have a material effect on ~~the Company’s~~our consolidated results of operations, financial position or cash flows.

Contingencies related to LSC Communication, Inc. and Subsidiaries (“LSC”) and Donnelley Financial Solutions, Inc. (“Donnelley Financial”)

Subsequent to the spinoff of LSC Communications, Inc. and Subsidiaries (“LSC”) and Donnelley Financial Solutions, Inc. (“Donnelley Financial”) on October 1, 2016, we may be contingently liable for obligations under various operating leases for office, warehouse and manufacturing locations of LSC and Donnelley Financial. In the event that LSC or Donnelley Financial, or any successor lessee, fail to make lease payments or fail to pay other obligations under these lease agreements, we may be required to satisfy those obligations to the lessor. Our exposure to these potential contingent liabilities decreases over time as LSC and Donnelley Financial pay monthly lease obligations and as the leases expire. As of June 30, 2021 these potential contingent obligations were $41.2 million and $1.8 million for LSC and Donnelley Financial, respectively.

On April 13, 2020, LSC announced that it, along with most of its U.S. subsidiaries, voluntarily filed for business reorganization under Chapter 11 of the U.S. Bankruptcy Code. In September 2020, a third-party (the “Buyer”) offered to buy the assets and assume certain obligations of LSC. Although the buyer assumed the majority of LSC’s existing leases, we continue to be contingently liable for these leases until their termination or renewal.

In May and June 2020 we became aware that LSC failed to make required monthly contributions to certain of their multiemployer pension plans (“MEPP”). In accordance with laws and regulations governing multiemployer pension plans, we believe that we and Donnelley Financial, as former members of the control group, are contingently liable on a joint and several liability basis for LSC’s MEPP obligations. We believe that the total undiscounted MEPP obligations for which LSC was responsible was approximately $100 million and was payable over an average 13-year period. The amount of our ultimate liability related to LSC's MEPP obligations is contingent upon the outcome of our negotiations with Donnelley Financial concerning how the obligations would be apportioned between us and Donnelley Financial. These negotiations commenced during the third quarter of 2020, when the parties agreed to enter into mediation, and then arbitration, after an agreement was not reached though the mediation process. During the first quarter of 2021, Donnelley Financial filed notice to commence the arbitration process, although no arbitration date has been set. In 2020, we recorded a contingent liability of approximately $37.1 million representing our estimate of the aggregate payments we believe we will be required to make with respect to LSC’s MEPP liabilities. This amount however could be adjusted in the future based on the final allocation as a result of the arbitration process. Payments to settle this liability are scheduled to be completed by 2034.

During the six months ended June 30, 2021, we and Donnelley Financial commenced negotiations with each of the three MEPPs to settle the MEPP liabilities and, we successfully negotiated a settlement with two of the three plans. As a result of these settlements, in the same period, we recorded a $2.2 million gain in restructuring, impairment and other expense on the Condensed Consolidated Statement of Operations reflecting our estimated share of the reduced liability. Cash payments made by us during the second quarter of 2021 were approximately $18.4 million and primarily related to the settlement of the two MEPP plans. As of June 30, 2021, we have $13.4 million accrued representing our estimate for our share of the remaining liability.

~~The Company’s debt~~Debt at ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016~~2020 consisted of the following:

September 30,

December 31,

2017

2016

Borrowings under the Credit Agreement

$
350.0

$
185.0

11.25% senior notes due February 1, 2019^(a)

172.2

172.2

7.625% senior notes due June 15, 2020

238.4

350.0

7.875% senior notes due March 15, 2021

447.1

448.8

8.875% debentures due April 15, 2021

80.9

80.9

7.00% senior notes due February 15, 2022

140.0

140.0

6.50% senior notes due November 15, 2023

290.6

350.0

6.00% senior notes due April 1, 2024

298.3

400.0

6.625% debentures due April 15, 2029

157.9

199.5

8.820% debentures due April 15, 2031

69.0

69.0

Other ^(b)

17.9

8.5

Unamortized debt issuance costs

(12.2
)

(16.5
)
Total debt

2,250.1

2,387.4

Less: current portion

(17.9
)

(8.2
)
Long-term debt

$
2,232.2

$
2,379.2

	June 30, 2021			December 31, 2020
Borrowings under the ABL Credit Facility	$	30.0		$	—
8.875% debentures due April 15, 2021		—			55.6
7.000% notes due February 15, 2022		79.3			79.3
6.500% notes due November 15, 2023		75.0			75.0
Term Loan due January 15, 2024 ^(a)		149.2			535.8
6.000% notes due April 1, 2024		61.7			61.7
6.125% secured notes due November 1, 2026		451.1			—
8.250% notes due July 1, 2027		245.8			245.8
6.625% debentures due April 15, 2029		103.4			103.4
8.500% notes due April 15, 2029		302.5			301.6
8.820% debentures due April 15, 2031		54.5			54.5
Unamortized debt issuance costs		(10.6	)		(9.6	)
Total debt		1,541.9			1,503.1
Less: current portion		79.3			61.1
Long-term debt	$	1,462.6		$	1,442.0

The fair values of the ~~senior~~ notes and debentures, which were determined using the market approach based upon quoted prices or interest rates available to ~~the Company~~us for ~~borrowings~~debt obligations with similar terms and maturities, were determined to be Level 2 under the fair value hierarchy. The fair value of ~~the Company’s~~our total debt at June 30, 2021 and December 31, 2020 was greater than its book value by approximately ~~$38.9~~$182.2 million and ~~$4.3~~$142.9 million, ~~at September 30, 2017 and December 31, 2016,~~ respectively.

On ~~September 29, 2017, the Company entered into~~April 28, 2021, we completed an ~~asset-based revolving credit facility pursuant to the second amended and restated credit agreement (the “Credit Agreement”) which amended and restated the Company’s $800.0~~offering of $400.0 million aggregate principal amount of 6.125% senior secured ~~revolving credit facility dated September 30, 2016.~~ notes due 2026 (the “2026 Notes”) at par. On May 10, 2021, we completed an additional $50.0 million offering of the 2026 Notes that were issued at a $1.1 million premium, increasing the aggregate principal amount of the 2026 Notes to $450.0 million. The 2026 Notes are general senior secured obligations of the Company and are guaranteed by our domestic, wholly-owned subsidiaries that are guarantors of the ABL Credit ~~Agreement provides~~Facility and Term Loan. Interest on the 2026 Notes is payable semi-annually on May 1 and November 1 of each year, commencing on November 1, 2021. The 2026 Notes mature on November 1, 2026. The proceeds from the offerings of the 2026 Notes were used to repay $387.6 million of principal outstanding under our Term Loan and to reduce the outstanding balance under our ABL Credit Facility, including the amount borrowed for arepayment of the $55.6 million principal outstanding of the 8.875% Debentures that matured on April 15, 2021.

On April 16, 2021, we amended our senior secured asset-based revolving credit facility ~~of up~~(the “ABL Credit Facility”) to, among other things, extend the maturity date from September 29, 2022 to April 16, 2026 and reduce the aggregate commitments from $800.0 million ~~subject~~ to ~~a borrowing base.~~ $650.0 million.

The amount available to be borrowed under the ABL Credit ~~Agreement~~Facility is equal to the lesser of (a) ~~$800.0~~$650.0 million and (b) a borrowing base formula based on the ~~aggregate~~ amount of accounts receivable, inventory, machinery, ~~and~~ equipment and, if we were to so elect in the future subject to the satisfaction of certain conditions, fee-owned real estate of ~~the Company~~ours and ~~certain of its~~our material domestic subsidiaries, ~~(the “Guarantors”)~~ ~~(collectively, the “Borrowing Base”),~~ subject to certain eligibility criteria and advance ~~rates.~~rates (collectively, the “Borrowing Base”). The aggregate amount of real estate, machinery and equipment that can be included in the Borrowing Base ~~cannot exceed $200.0~~formula is limited to $175.0 million.As a result of the amendment, the Company recognized a $6.2 million loss related to unamortized debt issuance costs and other expenses within loss on debt extinguishments in the Condensed Consolidated Statements of Operations for the three and nine months ended ~~September 30, 2017. Additionally, the Company had approximately $0.6 million of accrued financing fees as of~~ ~~September 30, 2017~~ ~~related to this transaction.~~

~~The Credit Agreement is scheduled to mature on September 29, 2022, at which time all outstanding amounts~~Borrowings under the ABL Credit ~~Agreement will be due and payable.~~ ~~The proceeds of the loans under the Credit Agreement may be used for working capital and general corporate purposes.~~

~~Any borrowings under the Credit Agreement will~~Facility bear interest at a rate dependent on the average quarterly availability ~~under the Credit Agreement~~ and ~~will be~~is calculated according to a base rate (except in certain circumstances, based on the prime rate) or a Eurocurrency rate (except in certain circumstances, based on LIBOR) plus an applicable margin. The applicable margin for base rate loans ranges from 0.25% to ~~0.50%~~0.75% and the applicable margin for Eurocurrency loans ranges from 1.25% to ~~1.50%~~1.75%. In addition, ~~an unused line~~a fee is payable quarterly on the unused portion of the ~~amount available to be borrowed under the Credit Agreement. The unused line~~total commitments. This fee accrues at a rate of either ~~0.250%~~0.25% or 0.375% depending upon the average usage of the facility. Borrowings under the ABL Credit Facility may be used for working capital and general corporate purposes.

Based on our Borrowing Base as of June 30, 2021 and letters of credit, we had approximately $462.0 million borrowing capacity available under the ABL Credit Facility. The weighted average interest rate on borrowings under our ABL Credit Facility was 1.5% and 1.9% during the six months ended June 30, 2021 and 2020, respectively. There was $30 million of outstanding borrowings on our ABL Credit Facility as of June 30, 2021 and 0 outstanding borrowings as of December 31, 2020.

During the second quarter of 2021, we utilized proceeds from the offerings of the 2026 Notes to repay $387.6 million of principal outstanding on our term loan B (the “Term Loan”), which we entered into on October 15, 2018 and is scheduled to mature on January 15, 2024. The repayment was applied to eliminate the quarterly principal payments that were previously required. The Term Loan bears interest based on the London Interbank Offered Rate (LIBOR) plus a margin of 5% or a base rate plus a margin of 4%. Debt extinguishment costs in conjunction with the partial repayment of the Term Loan were $6.2 million, which included unamortized debt issuance costs and discount and is recorded in Loss on debt extinguishment for three months ended June 30, 2021 on the Condensed Consolidated Statement of Operations.

The ~~Company’s obligations under~~credit agreements for our ABL Credit Facility (the “ABL Credit Agreement”)and Term Loan (the "Term Loan Credit Agreement"), and the ~~Credit Agreement are guaranteed by~~indenture for the ~~Guarantors~~2026 Notes (the “2026 Notes Indenture”) contain customary affirmative and ~~are secured by a security interest in~~negative covenants including negative covenants restricting, among other things, our ability to incur or guarantee debt, or issue preferred stock, make certain ~~assets of the Company~~loans or investments, make certain restricted payments (including payments on certain other debt, external dividends, and ~~its domestic subsidiaries, including accounts receivable, inventory, deposit accounts, securities~~

~~accounts, investment property, machinery~~stock repurchases), incur liens securing other debt, consummate certain fundamental transactions, enter into certain transactions with affiliates and ~~equipment and, to the extent related to the foregoing, general intangibles, documents, instruments and chattel paper, as well as 65% of the equity interests of their first-tier foreign subsidiaries.~~

consummate asset sales. The ABL Credit Agreement contains ~~customary restrictive covenants, including~~ a covenant which requires ~~the Company~~us to maintain a minimum fixed charge coverage ratio of 1.0 to 1.0 if availability under the ABL Credit Facility declines below certain ~~circumstances. In addition,~~levels. The Term Loan Credit Agreement and the ~~Company’s ability~~2026 Notes Indenture require that the net cash proceeds of significant asset sales be used to ~~undertake~~prepay the Term Loan and purchase the 2026 Notes to the extent that the net cash proceeds are not used for reinvestment in assets useful to our business, certain ~~actions, including, among other things, prepay certain junior debt, incur additional unsecured indebtedness~~acquisitions and ~~make certain restricted payments depends on satisfaction~~investments, repayment of certain ~~conditions, including, among other things, meeting minimum availability thresholds under the Credit Agreement.~~

~~The weighted average interest rate on~~ borrowings under ~~the credit facilities was 3.7%~~our ABL Credit Facility or to reduce, prepay, repay or purchase certain indebtedness, in each case, subject to certain restrictions and ~~2.2% during the nine months ended September 30, 2017 and 2016, respectively.~~

On June 7, 2017, the Company repurchased $41.7 million of the 6.625% debentures due April 15, 2029, $59.4 million of the 6.50% senior notes due November 15, 2023 and $101.7 million of the 6.00% senior notes due April 1, 2024 using borrowings under the prior credit agreement. The repurchases resulted in a net gain of $0.8 million which was recognized within loss on debt extinguishments limitations set forth in the ~~Condensed Consolidated Statements of Operations~~ ~~for the nine months ended September 30, 2017 related to the difference between the fair value of the debt repurchased~~Term Loan Credit Agreement and the ~~principal outstanding, partially offset by the premiums paid, unamortized debt issuance costs and other expenses~~.

On May 22, 2017, certain third party financial institutions (such financial institutions collectively, the “Third Party Purchasers”), launched cash tender offers for certain of the Company’s outstanding debt securities, including the Company’s 7.625% senior notes due June 15, 2020 and 7.875% senior notes due March 15, 2021. On June 7, 2017, the Third Party Purchasers purchased $111.6 million in aggregate principal amount of the 7.625% senior notes due June 15, 2020 (the “Third Party Purchase Notes”). On June 21, 2017, the Company exchanged 6,143,208 of its retained shares of Donnelley Financial for the Third Party Purchase Notes. The Company cancelled the Third Party Purchase2026 Notes ~~on June 21, 2017. As a result, the Company recognized a $14.4 million loss on debt extinguishment~~ ~~in the Condensed Consolidated Statements of Operations~~ ~~during the nine months ended~~ ~~September 30, 2017~~ related to premiums paid, unamortized debt issuance costs and other expenses. In addition, the Company recognized a net realized gain of $92.4 million resulting from the disposition of these retained shares of Donnelley Financial common stock within investment and other income-net ~~in the Condensed Consolidated Statements of Operations~~ ~~during the nine months ended~~ ~~September 30, 2017.~~

On August 4, 2017, the Company disposed of its remaining 99,594 shares of Donnelley Financial common stock in exchange for $1.9 million in aggregate principal of the Company’s 7.875% senior notes due March 15, 2021 which were cancelled. As a result, the Company recognized a $0.3 million loss on debt extinguishments in the Condensed Consolidated Statements of Operations during the three and nine months ended September 30, 2017, related to premiums paid, unamortized debt issuance costs and other expenses. In addition, the Company recognized a net realized gain of $1.6 million resulting from the disposition of these retained shares of Donnelley Financial common stock within investment and other income-net in the Condensed Consolidated Statements of Operations during the three and nine months ended September 30, 2017.Indenture.

Interest ~~income~~paid was ~~$0.8~~$31.7 million and ~~$2.3~~$54.6 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017, respectively,~~2021 and ~~$1.9~~$44.3 million and ~~$3.8~~$67.8 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2016, respectively~~. 2020.

~~The Company’s effective~~Interest income ~~tax rate~~ was ~~31.0%~~$0.3 million and 38.4% for the three months ended September 30, 2017 and 2016, respectively and (63.2%) and 80.1% for the nine months ended September 30, 2017 and 2016, respectively. The effective income tax rate for the nine months ended September 30, 2017 reflects the impact of the disposition of the Donnelley Financial and LSC retained shares. The retained shares of Donnelley Financial were disposed in non-taxable debt-for-equity exchanges during the three and nine months ended September 30, 2017. See Note 15, ~~Debt~~, for additional details regarding the dispositions of the Donnelley Financial retained shares of common stock. The sale of LSC shares generated a capital loss which will be carried forward; however, it is more likely than not that the benefit of such deferred tax asset will not be realized and a valuation allowance was recorded. See Note 2, ~~Discontinued Operations~~, for additional information regarding the sale of the LSC retained shares. The effective income tax rate for the three months ended September 30, 2017 reflects the impact of the impairment of goodwill in the DCS reporting unit and the inability to recognize a tax benefit on certain losses. The effective income tax rate$0.7 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2016 reflects~~2021 and $0.4 million and $0.9 million for the ~~impact of income generated in higher taxing jurisdictions~~three and ~~the inability to recognize a tax benefit on certain losses.~~six months ended June 30, 2020.

All derivatives are recorded as other current or noncurrent assets or other current or noncurrent liabilities in the Condensed Consolidated Balance Sheets at their respective fair values. Unrealized gains and losses related to derivatives are recorded in the Condensed Consolidated Statements of Operations, or in other comprehensive income (loss), net of applicable income taxes, ~~or in the Condensed Consolidated Statements of Operations,~~ depending on the purpose for which the derivative is held. For derivatives designated and that qualify as cash flow hedges, the effective portion of the unrealized gain or loss related to the derivatives are generally recorded in other comprehensive income (loss) until the transaction affects earnings. For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative, as well as the offsetting gain or loss on the hedged item attributable to the hedged risk, are recognized in the Condensed Consolidated Statements of Operations. Changes in the fair value of derivatives that do not meet the criteria for designation as a hedge at inception, or fail to meet the criteria thereafter, are recognized currently in the Condensed Consolidated Statements of Operations. At the inception of a hedge transaction, ~~the Company~~we formally ~~documents~~document the hedge relationship and the risk management objective for undertaking the hedge. In addition, ~~the Company assesses~~we assess both at inception of the hedge and on an ongoing basis, whether the derivative in the hedging transaction has been highly effective in offsetting changes in fair value or cash flows of the hedged item and whether the derivative is expected to continue to be highly effective. The impact of any ineffectiveness is also recognized ~~currently~~ in the Condensed Consolidated Statements of Operations.

~~The Company is~~We are exposed to the impact of foreign currency fluctuations ~~in certain countries in which it operates. The exposure to foreign~~based on our global operations. Foreign currency ~~movements is limited in many countries because~~fluctuations affect the ~~operating~~U.S. dollar value of revenues earned and expenses ~~of its various subsidiaries and business units~~incurred in foreign currencies. We are ~~substantially in the local~~also exposed to currency ~~of the country in which they operate. To~~risk to the extent ~~borrowings, sales, purchases, revenues, expenses~~we own assets or incur liabilities, or enter into other transactions that are not in the ~~local~~functional currency of the subsidiary ~~or operating unit,~~in which we operate. We employ different practices to manage these risks, including where appropriate the ~~Company is exposed to~~use of derivative instruments, such as foreign currency ~~risk. Periodically,~~forwards. To the ~~Company uses foreign exchange spot, forward and swap contracts to hedge exposures resulting from foreign exchange fluctuations. Accordingly,~~extent the gains and losses associated with the fair values of foreign currency ~~exchange contracts~~derivatives are recognized ~~currently~~ in the ~~Condensed~~ Consolidated Statements of Operations, ~~and~~they are generally offset by gains and losses on underlying payables ~~receivables, borrowings~~ and ~~net investments in foreign subsidiaries. The Company does~~receivables. We do not use derivative financial instruments for trading or speculative purposes. The aggregate notional value of the ~~foreign currency~~forward contracts at ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016~~2020 was ~~$136.7~~$268.7 million and ~~$172.2~~$220.7 million, respectively. The fair values of foreign currency contracts were determined to be Level 2 under the fair value hierarchy and are valued using market exchange rates.

In 2019 and 2020, we entered into interest rate swap agreements to manage interest rate risk exposure, effectively changing the interest rate on $400.0 million of ~~its fixed-rate senior notes to a~~our floating-rate Term Loan based on LIBOR ~~plus~~to a ~~basis point spread.~~fixed-rate. The interest rate swaps, with a notional value of $400.0 million, ~~at inception,~~ were designated as ~~fair value~~cash flow hedges against ~~changes in~~ the ~~value~~variability of ~~the Company’s $450.0 million 8.25% senior notes due March~~cash flows associated with our Term Loan scheduled to mature on January 15, ~~2019,~~2024, which ~~were~~are attributable to changes in the benchmark interest rate. ~~During 2014,~~In the ~~Company repurchased $211.1 million~~second quarter of ~~the 8.25% senior notes due March 15, 2019, and related~~2021, we terminated interest rate ~~swaps~~swap agreements with a notional ~~amount~~value of ~~$210.0~~$300.0 million ~~were terminated, resulting~~ in ~~payments~~conjunction with the partial repayment of ~~$4.2~~our Term Loan. The termination of these agreements resulted in a loss of $9.2 million recorded within interest expense on the Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2021.

The fair value of the ~~interest rate swaps. During the three months ended September 30, 2016, in connection with the tender of the Company’s 8.25% senior notes due March 15, 2019, the Company terminated the~~ remaining ~~$190.0~~$100.0 million ~~notional value of the~~ interest rate swap ~~agreements which resulted in cash received of $2.5 million for the fair value of the interest rate swaps.~~

~~The fair values of interest rate swaps were~~was determined to be Level 2 under the fair value hierarchy and ~~were~~was developed using the market standard methodology of netting the discounted future ~~fixed~~variable cash payments and the discounted expected ~~variable~~fixed cash receipts. ~~The variable cash receipts are based on the expectation of future interest rates derived from observed market interest rate curves. In addition, credit~~Credit valuation adjustments, which consider the impact of any credit enhancements to the contracts, are incorporated in the fair ~~values~~value to account for potential nonperformance risk. ~~On at least a quarterly basis, the Company evaluates~~We evaluate the credit value adjustments of the interest rate swap ~~agreements,~~agreement, which take into account the possibility of counterparty and ~~the Company’s~~our own ~~default.~~default, on at least a quarterly basis.

Our foreign currency contracts and interest rate ~~swaps~~swap are subject to ~~enforceable~~ master netting agreements that allow ~~the Company~~us to settle positive and negative positions with the respective counterparties. ~~The Company settles foreign currency~~Under these master netting agreements, net settlement generally permits us or the counterparty to determine the net amount payable for contracts due on ~~a net basis when possible. Foreign currency contracts that can be settled on a net basis are presented net~~the same date and in the ~~Condensed Consolidated Balance Sheets. Interest rate swaps were settled on~~same currency for similar types of derivative transactions. The master netting agreements generally also provide for net settlement of all outstanding contracts with a ~~gross basis and presented gross~~counterparty in the ~~Condensed Consolidated Balance Sheets.~~case of an event of default or a termination event.

~~The Company manages~~We manage credit risk for ~~its~~our derivative positions on a counterparty-by-counterparty basis, considering the net portfolio exposure with each counterparty, consistent with ~~its~~our risk management strategy for such transactions. ~~The Company’s~~Our agreements with each of ~~its~~our counterparties contain a provision where ~~the Company~~we could be declared in default on ~~its~~our derivative obligations if itwe either ~~defaults~~default or, in certain cases, isare capable of being declared in default of any of ~~its~~our indebtedness greater than specified thresholds. These agreements also contain a provision ~~whereby the Company~~where we could be declared in default subsequent to a merger or restructuring type event if the creditworthiness of the resulting entity is materially weakened.

~~At September~~As of June 30, ~~2017~~2021 and December 31, ~~2016,~~2020, the ~~total~~ fair ~~value~~values of ~~the Company’s foreign currency contracts, which were the only derivatives not designated as hedges along with the accounts in~~our derivative financial instruments and their classifications on the Condensed Consolidated Balance Sheets ~~in which the fair value amounts~~ were ~~included, was~~ as follows:

The pre-tax losses ~~related to derivatives not designated as hedges~~(gains) recognized on derivative financial instruments in the Condensed Consolidated Statements of Operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016~~2020 were as follows:

The pre-tax (gains) losses ~~related to the hedged items attributable to changes~~recognized on derivative financial instruments in the ~~hedged benchmark interest rate and the offsetting (gain) loss on the related interest rate swaps~~Condensed Consolidated Statements of Comprehensive Loss for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016~~2020 were as follows:

The Company also recognized a net reduction to interest expense of $0.2 million and $1.0 million for the three and nine months ended September 30, 2016, respectively, related to the Company’s fair value hedges, which included interest accruals on the derivatives and amortization of the basis in the hedged items.

Certain assets and liabilities are required to be recorded at fair value on a recurring basis. The following tables summarize the bases used to measure financial assets and liabilities that are carried at fair value on a recurring basis in the Condensed Consolidated Balance Sheets:

As of September 30, 2017, the Company no longer held investments in LSC or Donnelley Financial common stock. As of December 31, 2016, the Company’s investment in LSC and Donnelley Financial common stock were categorized as Level 2 securities as these shares were not registered and were valued based upon the closing stock price on the balance sheet date as they represented an identical equity instrument registered under the Securities Act of 1933, as amended.17. New Accounting Pronouncements

In ~~March 2017, the Financial Accounting Standards Board (“FASB”) issued~~ Accounting Standards Update (“ASU”) No. 2017-07 “Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” which changes the presentation of net periodic pension and postretirement benefit cost (net benefit cost) within the Statement of Operations. Under the current guidance, net benefit cost is reported as an employee cost within operating income. The amendment requires the bifurcation of net benefit cost, with the service cost component to be presented with other employee compensation costs in operating income while the other components will be reported separately outside of income from operations. ASU No. 2017-07 will be effective in the first quarter of 2018 and is required to be retrospectively adopted. Had this guidance been adopted as of January 1, 2017, income from operations within the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2017 would have been lower by $4.2 million and $12.5 million, respectively, and other non-operating income would have increased $4.2 million and $12.5 million, respectively.

~~In January 2017, the FASB issued~~ ~~ASU No. 2017-04 “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,”~~ ~~which~~ eliminates Step 2 from the current goodwill impairment test, including determining the implied fair value of goodwill and comparing it with the carrying amount of that goodwill. The standard requires entities to record impairment charges based on the excess of a reporting unit’s carrying amount over its fair value. ~~ASU No. 2017-04 will be effective in the first quarter of 2020; however early adoption is permitted for interim and annual goodwill impairment tests performed after January 1, 2017~~. The adoption of ASU 2017-04 may impact the results of future goodwill impairment tests and therefore could impact the Company’s consolidated financial position and results of operations. The Company has elected to early adopt this guidance and will apply this guidance to all impairment analyses performed after January 1, 2017.

~~In November 2016,~~December 2019, the FASB issued ASU No. ~~2016-18 “Statement of Cash Flows~~2019-12 “Simplifying the Accounting for Income Taxes (Topic ~~230): Restricted Cash.~~740)” ~~This update requires that restricted cash and cash equivalents be included as components of total cash and cash equivalents as presented on~~(“ASU 2019-12”), which simplifies the ~~statement of cash flows. ASU No. 2016-18 is effective~~accounting for ~~fiscal years, and interim periods within those years, beginning after December 15, 2017 and a retrospective transition method is required. Early adoption is permitted, including adoption~~income taxes by eliminating certain exceptions to the guidance in Accounting Standards Codification (“ASC”) 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim ~~period.~~ period and the recognition of deferred tax liabilities for outside basis differences. The ~~Company currently presents~~standard also simplifies aspects of the accounting for franchise taxes and enacted changes in ~~restricted cash~~tax laws or rates and ~~cash equivalents in~~clarifies the ~~investing section of its Condensed Consolidated Statement of Cash Flows. The new guidance will not impact financial results, but will~~accounting for transactions that result in a ~~change~~step-up in the ~~presentation~~tax basis of ~~restricted cash and restricted cash equivalents within the~~ ~~Condensed~~ ~~Consolidated Statements of Cash Flows~~.

~~In August 2016, the FASB issued~~goodwill. ASU No. 2016-15 “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” This update addresses whether to present certain specific cash flow items as operating, investing or financing activities. The amendments in this update are2019-12 is effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, ~~2017~~2020, however early adoption was permitted. We adopted ASU 2019-12 on January 1, 2021 and ~~are required to be retroactively adopted. Early adoption is permitted, including adoption in an interim period.~~ ~~The Company is currently evaluating~~ the changes did not have a material impact ~~of ASU No. 2016-15~~on ~~its~~ ~~Condensed~~ ~~Consolidated Statements of Cash Flows.~~our income tax provision.

In March ~~2016, the FASB issued~~ ~~ASU~~ ~~No. 2016-09 “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.”~~ Under the new guidance, when awards vest or are settled, the excess tax benefits and tax deficiencies are recorded as income tax expense or benefit in the income statement instead of within additional paid-in capital. This guidance will be applied prospectively. Furthermore, the guidance requires excess tax benefits to be presented as an operating activity on the statement of cash flows rather than as a financing activity, which can be applied retrospectively or prospectively. Under the new guidance, an election can be made regarding whether to account for forfeitures of share-based payments by recognizing forfeitures of awards as they occur or estimate the number of awards expected to be forfeited, as is currently required. This guidance is to be applied using a modified retrospective transition method, with a cumulative adjustment to retained earnings. T~~he Company has adopted this guidance as of January 1, 2017. The adoption had an immaterial impact on the Company’s Condensed Consolidated financial statements.~~

~~In February 2016, the FASB issued~~ ~~ASU No.~~ 2016-02 “Leases (Topic 842)” which requires lessees to put most leases on the balance sheet but recognize expense on the income statement in a manner similar to current accounting. For lessors, ASU 2016-02 also modifies the classification criteria and the accounting for sales-type and direct financing leases. The standard requires a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements and is effective in the first quarter of 2019. Early adoption of ASU 2016-02 is permitted; however the Company plans to adopt the standard in the first quarter of 2019. The Company is currently evaluating the impact of ASU 2016-02.

~~In May 2014,~~2020, the FASB issued ASU ~~No. 2014-09 “Revenue from Contracts~~2020-04, Reference Rate Reform, which provides companies with ~~Customers (Topic 606),” which outlines a single comprehensive model~~optional guidance, including expedients and exceptions for ~~entities~~applying generally accepted accounting principles to ~~use in accounting for revenue using a five-step process that supersedes virtually all existing revenue guidance. ASU 2014-09 also requires additional quantitative~~contracts and ~~qualitative disclosures.~~ ~~During 2016,~~other transactions affected by reference rate reform, such as LIBOR, was effective upon issuance and will be applied to future contracts with changes to the ~~FASB issued ASU 2016-08~~ ~~“Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net),”~~ ~~ASU 2016-10 “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing,”~~ ~~and ASU 2016-12~~ ~~“Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients,”~~ ~~which clarify~~reference rate. To date, we have had no such modification to any of our contracts. We are currently evaluating the revenue recognition implementation guidance on principal versus agent considerations, identifying performance obligations, determining whether an entity's promise to grant a license provides a customer with either a right to use or a right to access the entity's intellectual property, assessing the collectability criteria, presentation of sales and similar taxes, noncash consideration and various other items. The amendments in these ASUs affect the guidance in ASU 2014-09, and the effective date and transition requirements are the same as those for ASU 2014-09 which, as amended by ASU ~~2015-14 “Revenue from Contracts with Customers (Topic 606): Deferral~~prospective impact of the ~~Effective Date,”~~standard, and we will ~~be effective for the Company on January 1, 2018.~~adopt ASU 2020-04 upon such contract modification. The ~~standard allows the option~~impact of ~~either a full retrospective adoption, meaning~~ the standard is ~~applied~~not expected to ~~all periods presented, or a modified retrospective adoption, meaning the standard is applied only~~be material to ~~the most current period.~~

Based upon preliminary results of management’s evaluation, the most impactful aspects of the guidance relate to the timing of recognition for the revenue from customized products over time versus at a point in time, as well as inventory billed but not yet shipped. The Company has amounts of customized products in the Variable Print and International segments which are currently recognized when the products are completed and shipped to the customer. Currently, the Company defers revenue for inventory billed but not yet shipped which under the new revenue standard, the Company may be able to recognize revenue for certain inventory billed but not yet shipped. The actual revenue recognition treatment required under this new standard will be dependent on contract specific terms. The Company is still in the process of evaluating and designing the necessary changes to its business processes, systems and controls to support recognition and disclosure under the new standard.~~The Company will adopt the standard in the first quarter of 2018 and currently anticipates applying the modified retrospective approach.~~

I~~tem~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

R.R. Donnelley & Sons Company (“RRD,” the “Company,” “we,” “us,” and “our”), a Delaware corporation, helps organizations communicate more effectively by working to create, manage, produce, distribute and process content on behalf of our ~~customers.~~clients. We assist ~~customers~~clients in developing and executing multichannel communication strategies that engage audiences, reduce costs, drive revenues and ~~increase~~enhance compliance. Our innovative content management offering, production platform, ~~logistics services,~~ supply chain management, outsourcing capabilities and customized consultative expertise assists our ~~customers~~clients in the delivery of integrated messages across multiple media to highly targeted audiences at optimal times ~~for~~to their customers in virtually every private and public sector. We have strategically located operations that provide local service and responsiveness while leveraging the economic, geographic and technological advantages of a global organization.

On October 1, 2016, we completed the previously announced separation of our financial communications and data services business (“Donnelley Financial Solutions, Inc.” or “Donnelley Financial”) and our publishing and retail-centric print services and office products business (“LSC Communications, Inc.” or “LSC”) into two separate publicly-traded companies (the "Separation"). We completed the tax free distribution of approximately 26.2 million shares, or 80.75%, of the outstanding common stock of Donnelley Financial and 26.2 million shares, or 80.75%, of the outstanding common stock of LSC, to RRD stockholders (the “Distribution”). The Distribution was made to RRD stockholders of record as of the close of business on September 23, 2016, who received one share of Donnelley Financial common stock and one share of LSC common stock for every eight shares of RRD common stock held as of the record date. As a result of the Distribution, Donnelley Financial and LSC are now independent public companies trading under the symbols “DFIN” and “LKSD”, respectively, on the New York Stock Exchange. Immediately following the Distribution, we held 6.2 million shares of Donnelley Financial common stock and 6.2 million shares of LSC common stock. As of September 30, 2017, we no longer held any shares of LSC or Donnelley Financial common stock.

~~The financial results of Donnelley Financial and LSC for periods prior to the Distribution have been reflected within the disclosures of this~~ ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~ ~~as discontinued operations. Additionally, sales from RRD to Donnelley Financial and LSC previously eliminated in consolidation have been recast and are now shown as external sales of RRD within the financial results of continuing operations.~~ ~~The Company’s cash flows for all periods prior to the October 1, 2016 Distribution include the impact of LSC and Donnelley Financial. See Note 1,~~ ~~Basis of Presentation, and Note 2,~~ ~~Discontinued Operations, to these Condensed Consolidated Financial Statements for additional information.~~

Immediately following the Distribution on October 1, 2016, we affected a one-for-three reverse stock split for RRD common stock (the “Reverse Stock Split”). The Reverse Stock Split was approved by our Board of Directors on September 14, 2016 and previously approved by our stockholders at the annual meeting on May 19, 2016. As a result of the Reverse Stock Split, the number of issued and outstanding and treasury shares of our common stock was reduced proportionally based on the Reverse Stock Split ratio of one share for every three shares of common stock held before the Reverse Stock Split. Refer to Note 1, ~~Basis of Presentation, to the Condensed Consolidated Financial Statements for additional information regarding the Reverse Stock Split.~~

During the third quarter of 2017, the Company identified an error in the accounting for certain contracts with an inventory buy-back option within the Asia reporting unit, which is in the International segment. As a result, the error, which was determined by management to be immaterial to the previously issued financial statements, has been corrected herein from the amounts previously reported. Refer to Note 1, ~~Basis of Presentation, to the Condensed Consolidated Financial Statements for additional information regarding the revision.~~

Our segments and their ~~respective~~ product and service offerings are summarized below:

This segment includes our U.S. short-run and transactional printing operations. This segment’s primary product offerings include commercial and digital print, direct mail, labels, statement printing, forms and packaging.

~~This segment includes our logistics services, print management offerings~~Business Services provides customized solutions at scale to help clients inform, service and ~~digital and creative solutions.~~

~~This segment includes our non-U.S. printing operations in Asia, Latin America, Canada and Europe. This~~transact with their customers. The segment’s primary product and service offerings include commercial print, packaging, ~~books, catalogs, magazines, retail inserts,~~labels, statement printing, ~~commercial~~supply chain management, forms and business process outsourcing. This segment also includes all of our operations in Asia, Europe, Canada and Latin America.

Marketing Solutions leverages an integrated portfolio of data analytics, creative services and multichannel execution to deliver comprehensive, end-to-end solutions. The segment’s primary product and service offerings include direct marketing, in-store marketing, digital print, ~~forms, labels, logistics services, directories,~~kitting, fulfillment, digital and creative solutions and direct mail. Additionally, this segment includes our business process outsourcing business and Global Turnkey Solutions operations. Business process outsourcing provides transactional print and outsourcing services, statement printing, direct mail and print management offerings through its operations in Europe, Asia and North America. Global Turnkey Solutions provides outsourcing capabilities, including product configuration, customized kitting and order fulfillment for technology, medical device and other companies around the world through its operations in Europe, North America and Asia.list services.

~~Corporate consists of unallocated~~Certain selling general and administrative ~~activities~~expenses are not directly attributable to our operating segments and ~~associated~~are therefore reported at Corporate. These expenses ~~including, in part,~~include executive, legal, finance, communications, certain facility costs and ~~LIFO~~last-in-first-out inventory provisions. In addition, certain costs and earnings of employee benefit plans, such as ~~pension and other postretirement benefits plan~~OPEB expense (income) and share-based compensation, are included in Corporate and not allocated to the operating segments. Corporate also manages ~~the~~our cash pooling structures, which enables participating international locations to draw on our ~~overseas~~international cash resources to meet local liquidity needs.

~~We separately report~~International Logistics which completed our ~~net sales, related costs~~plan to exit our Logistics business, a component of ~~sales~~the Business Services reporting segment. The Logistics business was comprised of DLS Worldwide, International Logistics, Print Logistics and ~~gross profit~~Courier Logistics. These transactions are part of our strategy to optimize our portfolio and reduce debt. As part of our plan, we previously sold the Print Logistics business in July 2018 and the Courier Logistics business in March 2020. Accordingly, we have reflected the Print Logistics business, Courier Logistics business, the DLS Worldwide business, and the International Logistics business as discontinued operations. The financial results of these businesses have been excluded from continuing operations and segment results for our product and service offerings. Our product offerings primarily consist of commercial and digital print, statement printing, direct mail, packaging, labels, forms, magazines, catalogs, retail inserts, books, directories, manuals and other related products procured through our print management offering. Our service offerings primarily consist of logistics, certain business outsourcing services and digital and creative solutions.

~~On August 4, 2016, the Company acquired Precision Dialogue, a provider of email marketing, direct mail marketing and other services with operations in the United States.~~

~~On January 11, 2016, the Company sold two entities within the business process outsourcing reporting unit.~~

~~For further information on the above acquisitions and dispositions, see~~ all periods presented unless otherwise noted. Refer to Note 3, ~~Acquisitions and Dispositions~~,2 –Discontinued Operations to ~~the~~our Condensed Consolidated Financial ~~Statements.~~Statements for additional information.

In 2020, the COVID-19 pandemic created, and continues to create, significant business challenges for companies around the world, including many of our clients across the broad number of industries we serve. In response to the pandemic, we established a formal operating plan that we are utilizing to manage our business through this challenging global business environment. Our operating plan consists of three clear priorities: to protect the health and safety of our employees, to sustain operational and supply chain continuity, and to effectively manage our business performance and liquidity throughout this very volatile period.

We are continually evolving our policies and procedures to adhere to the latest best practices being provided by the Centers for Disease Control (“CDC”) and World Health Organization (“WHO”). Our cross-functional COVID Task Force created at the onset of the pandemic has developed safety measures, policies, and procedures for our workplace. We have implemented flexible working policies, including telecommuting and staggered shifts, while allowing for voluntary leaves of absence. We recently have begun to welcome employees back into our offices in a cautious and phased approach. We continue to enforce social distancing policies within all of our facilities, require unvaccinated employees to wear face coverings, and provide training for adherence to personal hygiene best practices in line with CDC and WHO guidelines.

We have activated our business continuity plans and are leveraging our strong supply chain partnerships to continue to meet the ongoing needs of our 30,000 global clients. We remain fully operational across the 28 countries in which we operate.

Although the COVID-19 pandemic significantly impacted the Company’s financial results in 2020, and continues to create some challenges in 2021, we believe that there are three primary factors that are helping mitigate the top line impact from the pandemic. These factors include our diverse portfolio of products and services, the lack of client concentration, and the products and services we have introduced to meet the evolving needs of our clients.

The extent to which the pandemic will continue to impact our business, results of operations, financial position and cash flows will depend on future developments which remain highly uncertain and cannot be fully predicted or estimated at this time. However, amidst the global uncertainty posed by COVID-19, we are positioning the Company to weather economic uncertainty and protect the short and long-term interests of our stakeholders. Continuing into 2021, we remain laser-focused on lowering our cost structure and on maintaining a sufficient level of liquidity.

Net sales increased by ~~$9.3~~$136.0 million, or ~~0.5%~~13.5%, for the ~~third quarter of 2017~~three months ended June 30, 2021 compared to the same period in ~~the prior year. There was a $5.3~~2020. Second quarter net sales were favorably impacted by $21.7 million ~~or 0.3%, increase~~ due to changes in foreign exchange rates. ~~After including~~Net sales also increased due to higher volume reflectingstrengthening demand for most of our products and services. Notably, higher demand for e-commerce sales have contributed to the ~~impact~~growth in our Packaging and Labels products. The increase also reflects continued recovery from the COVID-19 pandemic, partially offset by last year’s Census project, which was completed in mid-2020.

Income from operations for the three months ended June 30, 2021 was $28.2 million, an increase of ~~changes in~~$47.2 million compared to a loss of $19.0 million for the prior year period. The increase was primarily driven by higher sales, cost control initiatives and lower restructuring and impairment expenses, partially offset by unfavorable foreign exchange rates ~~the increase in net sales was due~~and higher incentive compensation.

We continue to increased volume in the International segment driven by the Asia reporting unit, partially offset by lower volume in the Variable Print segment, lower postage pass-through sales in the Strategic Services segment and price pressures across the segments.

~~The Company continues to strategically~~ assess opportunities to reduce ~~its~~our cost structure and enhance productivity throughout the business. During the ~~nine~~three months ended ~~September~~June 30, ~~2017, the Company~~2021, we realized significant cost savings from recent and previous restructuring activities including the reorganization of administrative and support functions across all segments, ~~as well as~~several facility ~~consolidations.~~ consolidations, and asset rationalization. These savings were partially offset by the effect of unfavorable exchange rates.

Net cash used in operating activities for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 was ~~$12.6~~$64.8 million as compared to ~~cash provided by~~$44.2 million used in operating activities ~~of $7.8 million~~ for the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2020. The ~~decrease~~increase in ~~net cash flow from operating activities~~2021 was primarily driven by ~~lower cash earnings,~~ $23.9 million of LSC bankruptcy related payments primarily associated with lump sum settlements of two MEPP plans, higher tax and incentive compensation payments, and a $9.2 million payment to terminate certain interest rates swaps, partially offset by lower restructuring and interest payments.

While client demand for our products and services continues to strengthen, ongoing challenges including labor shortages, supply chain disruption, inflationary increases and shipping delays caused by container shortages in key ports including China, remain. These issues, combined with the ~~timing~~ongoing uncertainty related to the COVID-19 pandemic, create added challenges when predicting future business performance. Excluding the unpredictability related to these factors, we now expect net sales for 2021 to be up by 1% to 3% taking into consideration reductions from the ending of ~~supplier~~the 2020 Census project and ~~customer payments and lower interest, spinoff-related transaction and tax payments~~.one-time pandemic related projects completed in 2020 offset by further economic recovery as the year progresses.

~~The changes in~~Our outlook assumes that the ~~Company’s income from operations, operating margin, net earnings (loss) attributable to RRD common stockholders~~U.S. economy and ~~net earnings (loss) attributable to RRD common stockholders per diluted share for~~ the ~~three months ended September 30, 2017, from the three months ended September 30, 2016, were due to the following:~~

~~2017 restructuring, impairment and other charges - net:~~ included pre-tax charges of $21.3 million for the impairment of goodwill in the digital and creative solutions reporting unit within the Strategic Services segment; $10.7 million for employee termination costs; $1.1 million of lease termination and other restructuring costs; $0.5 million for multi-employer pension plan withdrawal obligations unrelated to facility closures; and $0.2 million impairment charges of other long-lived assets related to facility closures. See Note 7,~~Restructuring, Impairment and Other Charges~~, ~~to the Condensed Consolidated Financial Statements for additional details.~~

~~2016 restructuring, impairment and other charges - net:~~ included pre-tax charges of $9.7 million for employee termination costs; $0.1 million for a net gain on the sale of previously impaired other long-lived assets; $0.6 million of lease termination and other restructuring costs; and $0.6 million of other charges for multi-employer pension plan withdrawal obligations unrelated to facility closures. See Note 7,~~Restructuring, Impairment and Other Charges~~, ~~to the Condensed Consolidated Financial Statements for additional details.~~

~~Other postretirement benefit plan obligation (OPEB) curtailment gains:~~ ~~included a pretax gain of $19.7 million ($12.2 million after-tax) as a result of curtailments~~economies of the ~~Company’s OPEB plans during the three months ended September 30, 2016.~~

~~Pension settlement charges:~~ ~~included pre-tax charges of $0.3 million ($0.3 million after-tax) for the three months ended September 30, 2016, related to lump-sum pension settlement payments.~~

~~Acquisition-related expenses:~~ included pre-tax charges of $0.7 million ($0.4 million after-tax) related to legal, accounting and other expenses for the three months ended September 30, 2016 associated with contemplated or completed acquisitions.

~~Loss on dispositions of businesses:~~ ~~included a pre-tax loss on the sale of entities of $0.3 million ($0.1 million after-tax) for the three months ended September 30, 2016.~~

~~Loss on debt extinguishments:~~ included a pre-tax net loss of $6.5 million ($4.3 million after-tax) for the three months ended September 30, 2017 related to unamortized debt issuance costs, tender premiums and other expenses associated with the amendment and restatement of the credit agreement and the debt-for-equity exchange of senior notes during the three months ended September 30, 2017. See Note 15, ~~Debt,~~ ~~to the Condensed Consolidated Financial Statements for additional details.~~

~~Net gain on investments:~~ included a pre-tax non-cash net realized gain of $1.6 million ($1.7 million after-tax) for the three months ended September 30, 2017, resulting from the debt-for-equity exchange of the remaining portion of the Company’s retained shares of Donnelley Financial for certain outstanding senior notes. See Note 15, ~~Debt,~~ ~~to the Condensed Consolidated Financial Statements for additional details of the debt-for-equity exchange.~~

~~Operations:~~ ~~reflected lower volume~~foreign countries in certain reporting units within the International and Variable Print segments, price pressures, start-up costs within the Asia reporting unit and higher transactional foreign currency expense, partially offset by lower corporate and other overhead costs related to our operations prior to the Separation, higher volume in the Asia reporting unit, lower healthcare and depreciation and amortization expense and cost control initiatives. See further details in the review of operating results by segment that follows below.

The changes in the Company’s income from operations, operating margin, net earnings (loss) attributable to RRD common stockholders and net earnings (loss) attributable to RRD common stockholders per diluted share for the nine months ended September 30, 2017, from the nine months ended September 30, 2016, were due to the following:

~~2017 restructuring, impairment and other charges - net:~~ included pre-tax charges of $21.3 million for the impairment of goodwill in the digital and creative solutions reporting unit within the Strategic Services segment; $19.5 million for employee termination costs; $3.8 million of lease termination and other restructuring costs; $1.7 million for multi-employer pension plan withdrawal obligations unrelated to facility closures; and $0.4 million of net impairment charges of long-lived assets. See Note 7,~~Restructuring, Impairment and Other Charges~~, ~~to the Condensed Consolidated Financial Statements for additional details.~~

~~2016 restructuring, impairment and other charges - net:~~ included pre-tax charges of $20.7 million for employee termination costs; $1.0 million for a net gain on the sale of previously impaired other long-lived assets, partially offset by impairment charges related to buildings and machinery and equipment associated with facility closures; $2.9 million of lease termination and other restructuring costs; and $1.7 million of other charges for multi-employer pension plan withdrawal obligations unrelated to facility closures. See Note 7,~~Restructuring, Impairment and Other Charges~~, ~~to the Condensed Consolidated Financial Statements for additional details.~~

~~Spinoff-related transaction expenses:~~ included pre-tax charges of $3.3 million ($2.1 million after-tax) related to consulting and other expenses for the nine months ended September 30, 2017 associated with the Separation and Distribution.

~~Other postretirement benefit plan obligation (OPEB) curtailment gains:~~ ~~included a pre-tax gain of $19.7 million ($12.2 million after-tax) as a result of curtailments of the Company’s OPEB plans during the nine months ended September 30, 2016.~~

~~Pension settlement charges:~~ ~~included pre-tax charges of $20.7 million ($12.3 million after-tax) for the nine months ended September 30, 2016 related to lump-sum pension settlement payments.~~

~~Acquisition-related expenses:~~ included pre-tax charges of $2.7 million ($1.8 million after-tax) related to legal, accounting and other expenses for the nine months ended September 30, 2016 associated with contemplated or completed acquisitions.

~~Net gain on disposal of businesses:~~ ~~included a pre-tax gain on the sale of entities in the International segment of $12.0 million ($12.2 million after-tax) for the nine months ended September 30, 2016.~~

~~Loss on debt extinguishments:~~ included a pre-tax net loss of $20.1 million ($12.8 million after-tax) related to the premiums paid in connection with the tenders, unamortized debt issuance costs and other expenses due to the debt-for-equity exchange of senior notes, the repurchase of debentures and senior notes and the amendment and restatement of the credit agreement during the nine months ended September 30, 2017. See Note 15, ~~Debt,~~ ~~to the Condensed Consolidated Financial Statements for additional details.~~

~~Net gain on investments:~~ included a pre-tax non-cash net realized gain of $94.0 million ($96.1 million after-tax) resulting from the debt-for-equity exchange of the Company’s retained shares of Donnelley Financial for certain outstanding senior notes and a pre-tax gain of $1.3 million ($0.7 million after-tax) resulting from the sale of certain of the Company’s affordable housing investments, partially offset by a pre-tax loss of $51.6 million ($51.6 million after-tax) resulting from the sale of the Company’s retained shares in LSC during the nine months ended September 30, 2017. The nine months ended September 30, 2016 included pre-tax gain of $0.1 million ($0.1 million after-tax) resulting from the sale of certain of the Company’s affordable housing investments.

~~Operations:~~ reflected lower volume in certain reporting units within the International and Variable Print segments, price pressures and higher transactional foreign currency expense, partially offset by lower corporate and other overhead costs related to our operations prior to the Separation, higher volume in the Asia reporting unit, reduced bad debt, legal and depreciation and amortization expenses and cost control initiatives.

Our customers are in an evolving market. While the market is large and fragmented, there are tremendous changes occurring in how organizations need to create, manage, deliver and measure their communications. Key factors facing our customers include regulatory changes, sensitivity to economic conditions, raw material pricing volatility and USPS actions. In addition, technological changes, including the electronic distribution of documents and data, online distribution and hosting of media content, and advances in digital printing, print-on-demand and internet technologies, continue to impact the market for some of our products and services, such as statement printing and forms.

We work with our customers to create, manage, deliver and optimize their multichannel communications strategies by providing innovative solutions to meet increasing customer demands in light of the large and evolving marketplace. One of our competitive strengths is thatwhich we offer a wide array of communications products and services, including print and content management, which provide differentiated solutions for our customers. We are also able to manage the storage and distribution of products for our customers by offering warehousing and inventory management solutions that allow customers to store printed materials and to efficiently ship them using our platform. Our logistics business offers our customers access to our proprietary technology that is designed to determine the most efficient and cost-effective method of shipping depending on our customers’ needs. We believe our breadth of offerings provides us with a distinct competitive advantage. We have andoperate will continue to develop and expand our creative and design, content management, digital and print production, supply chain management and distribution services to address our customers’ evolving needs while supportingrecover from the ~~strategic objective~~economic effects of ~~becoming a leading global provider of integrated communication products and services.~~

~~The print and related services industry, in general, continues to have excess capacity and remains highly competitive and fragmented.~~

~~We believe that, across our range of products and services, competition is based primarily on quality and~~COVID-19, although the ~~ability to service~~recovery may be uneven given the special needs of customers at a competitive price. Therefore, we believe we need to continue to differentiate our product and service offerings and aggressively manage our cost structure to remain competitive.

We also operate in a highly competitive and fragmented market for commercial freight transportation and third-party logistics services. Primary competitors to our services include other national non-asset based third-party logistics companies, as well as regional or niche freight brokerages, asset-based carriers offering brokerage and/or logistics services, wholesale intermodal transportation service providers and rail carriers. In addition, we may from time to time compete against carriers’ internal sales forces or shippers’ internal transportation departments.

~~Advertising and consumer spending trends affect demand in several~~uncertainty of the ~~end-markets~~pandemic. Our outlook also assumes that we ~~serve. As such, we have some seasonality in the second half of the year in our business, despite the breadth of our product and services offerings.~~

The primary raw materials we use in our print businesses are paper and ink. We negotiate with leading suppliers to maximize our purchasing efficiencies. Some of the paper we use is supplied directly by customers. Variations in the cost and supply of certain paper grades and ink formulations used in the manufacturing process may affect the Company’s consolidated financial results. Paper prices fluctuated during the first nine months of 2017 and volatility in the future is expected. Generally, customers directly absorb the impact of changing prices on customer-supplied paper. With respect to paper we purchase, we have historically passed most changes in price through to our customers. We believe contractual arrangements and industry practice will support our continued ability to pass on any future paper price increases, but there is no assurance that market conditions will continue to enable us to successfully do so. We believe that the paper supply is consolidating, and there may be shortfalls in the future in supplies necessary to meet the demands of the entire marketplace. Higher paper prices and tight paper supplies may have an impact on customers’ demand for printed products. We resell waste paper and other print-related by-products. We also have undertaken various strategic initiatives to mitigate any foreseeable supply disruptions with respect to our ink requirements. We may be impacted by changes in prices for these by-products in the future.

We continue to monitor the impact of changes in the price of crude oil and other energy costs, which impact our ink suppliers, logistics operations and manufacturing costs. Crude oil, energy prices and market cost of transportation continue to be volatile. We believe our logistics operations will continue to be able to pass on to our clients a substantial ~~portion~~majority of material price increases, and that we will not experience any ~~increases in fuel prices directly~~substantial operational outages related to labor shortages and supply chain interruptions. We continue to leverage our ~~customers~~client relationships in order to ~~offset the impact~~provide a larger share of related cost increases. Decreases in fuel prices are also passed on to customers which negatively impact sales and income from operations. However, our logistics operations is restricted in its ability to pass on increased cost of transportation costs to some customers in the short term. Therefore, increases in the market cost of transportation will negatively impact income from operations. We generally cannot pass on to customers the impact of higher energy prices on our manufacturing costs. We cannot predict sudden changes in energy prices and the impact that possible future changes in energy prices might have upon either future operating costs or customer demand or the related impact either will have on our consolidated annual results of operations, financial position or cash flows.

Our products are distributed to end-users through U.S. and foreign postal services, through retail channels, electronically or by direct shipment to customer facilities. Through our logistics operations, we manage the distribution of most customer products we print in the U.S. and Canada to maximize efficiency and reduce costs for customers.

As a leading provider of print logistics and among the largest mailers of Standard Mail in the U.S., we work closely with our customers and the USPS to offer innovative products and mail preparation services to minimize postage costs. While we do not directly absorb the impact of higher postal rates on our customers’ mailings, demand for products distributed through the U.S. or foreign postal services has been negatively impacted by increases in postal rates, as postal costs are a significant component of many customers’ cost structures.

Under the 2006 Postal Accountability and Enhancement Act (“PAEA”), it had been anticipated that postage for market dominant mail categories would increase annually by an amount equal to or slightly less than the Consumer Price Index (the “CPI”). On April 10, 2016, the USPS removed the exigent surcharge, which was approved in December 2013, resulting in a 4.3% decrease in postage rates for all significant mail categories.

~~The USPS implemented a CPI postage increase on January 22, 2017 of approximately 1.0%.~~their communications needs. In addition, ~~there is a pending bi-partisan legislative proposal that seeks~~we expect to stabilize the financial condition of the USPS, which among other things calls for restoring a 2.15% increase (approximately half of the exigent surcharge) on market-dominant mail products. Absent such legislative changes, the USPS filed with the Postal Regulatory Commission on October 6, 2017 for a price increase of 1.905% for First-Class Mail, 1.908% for Marketing Mail (aka Standard Mail), 1.924% for Periodicals Mail, 1.960% for Package Services Mailcontinue cost control and ~~1.986% for Special Services to become effective January 21, 2018.~~productivity initiatives, including selected facility consolidations and asset rationalizations.

Additionally, as required by PAEA, the Postal Regulatory Commission began a comprehensive review of the law on December 20, 2016, its 10 year anniversary, to determine if the current system for regulating rates and classes for market-dominant products is achieving the original objectives of the law. The study still in process and their recommendations are due by the end of 2017. The impact of theseWe initiated several restructuring actions ~~cannot currently be estimated.~~

~~Mail transportation services to the USPS facilities across the country accounted for approximately 31% of the Company’s logistics revenues~~ during the ~~nine months ended September 30, 2017.~~

~~We perform~~past three years to further reduce our ~~goodwill impairment tests annually as~~overall cost structure. These restructuring actions included the closures of October 31, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. As part of its interim review for indicators of impairment, management analyzed potential changes in the value of individual reporting units with goodwill based on each reporting unit’s operating results for the nine months ended September 30, 2017 compared to expected results. In addition, management considered how other key assumptions, including discount rates and expected long-term growth rates, used in the last fiscal year’s impairment analysis, could be impacted by changes in market conditions and economic events.

Management considered trends in these factors when performing its assessment of whether an interim impairment review was required for any reporting unit. During the third quarter of 2017, the Company recognized a non-cash charge of $21.3 million for the impairment of goodwill in the digital and creative solutions reporting unit which is included within the Strategic Services segment. The goodwill impairment charge in the digital and creative solutions reporting unit was due to the notification from a major customer that they will be transitioning their business away from digital and creative solutions beginning in the fourth quarter of 2017,manufacturing facilities as well as ~~declines in sales with other existing customers which resulted in lower expectations of future revenues, profitability~~the reorganization and cash flows as compared to the expectations as of the October 31, 2016 annual goodwill impairment test. As of September 30, 2017, the digital and creative solutions reporting unit had no remaining goodwill. Based on the September 30, 2017 interim assessment, management concluded that other than the goodwill impairment recognized in the digital and creative solutions reporting unit, no events or changes in circumstances indicated that it was more likely than not that the fair value for any reporting unit had declined below its carrying value. Nevertheless, significant changes in economic and market conditions could result in changes to expectations of future financial results and key valuation assumptions. Such changes could result in revisions of management’s estimates of the fair value of the Company’s reporting units and could result in a material impairment of goodwill as of October 31, 2017, the Company’s next annual measurement date.

~~The funded status of our pension and other postretirement benefits plans is dependent upon many factors, including returns on invested assets and the level~~consolidation of certain ~~market interest rates. Market conditions may lead~~operations. These and future cost reduction actions are expected to ~~changes~~have a positive impact on operating earnings in ~~the discount rates (used to value the year-end benefit obligations of the plans)~~2021 and the market value of the securities held by the plans, which could significantly increase or decrease the funded status of the plans. We review the actuarial assumptions on an annual basis as of December 31. Based on current estimates,in future years. In addition, we expect to ~~make~~implement other cost reduction opportunities, which may result in additional restructuring charges. These restructuring actions will be funded by cash ~~contributions of approximately $17.0 million to~~generated from operations and cash on hand or, if necessary, by utilizing our ~~pension and other postretirement benefits plans for the full year 2017, of which $12.4 million has been contributed during the nine months ended September 30, 2017.~~

As of December 31, 2016 the Company had approximately $70.0 million of U.S. deferred tax assets which at this time, we believe is more likely than not that we will realize these deferred tax assets. However, in the next twelve months we may be required to establish a valuation allowance to reduce the carrying value of certain U.S. deferred tax assets.

In the financial review that follows, we discuss our consolidated results of operations, financial position, cash flows and certain other information. This discussion should be read in conjunction with our Condensed Consolidated Financial Statements and related notes.credit facilities.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED ~~SEPTEMBER~~JUNE 30, ~~2017~~2021 AS COMPARED TO THE THREE MONTHS ENDED ~~SEPTEMBER~~JUNE 30, ~~2016~~

The following table shows the results of continuing operations for the three months ended September 30, 2017 and 2016, which reflects the results of acquired businesses from the relevant acquisition dates:

Three Months Ended September 30,

2017

2016

$ Change

% Change

(in millions, except percentages)

Products net sales
$
1,322.0

$
1,327.8

$
(5.8
)

(0.4
%)
Services net sales

412.9

397.8

15.1

3.8
%
Total net sales

1,734.9

1,725.6

9.3

0.5
%
Products cost of sales (exclusive of depreciation and amortization)

1,064.1

1,030.7

33.4

3.2
%
Services cost of sales (exclusive of depreciation and amortization)

346.4

330.7

15.7

4.7
%
Total cost of sales

1,410.5

1,361.4

49.1

3.6
%
Products gross profit

257.9

297.1

(39.2
)

(13.2
%)
Services gross profit

66.5

67.1

(0.6
)

(0.9
%)
Total gross profit

324.4

364.2

(39.8
)

(10.9
%)
Selling, general and administrative expenses (exclusive of depreciation and amortization)

207.7

218.1

(10.4
)

(4.8
%)
Restructuring, impairment and other charges-net

33.8

10.8

23.0

nm

Depreciation and amortization

47.0

51.0

(4.0
)

(7.8
%)
Other operating expense

—

0.3

(0.3
)

nm

Income from operations
$
35.9

$
84.0

$
(48.1
)

(57.3
%)

Net sales of products for the three months ended September 30, 2017 decreased $5.8 million, or 0.4%, to $1,322.0 million versus the same period in 2016, including a $5.1 million, or 0.4%, increase due to changes in foreign exchange rates. Net sales of products decreased due to higher volume within the Asia reporting unit, partially offset by lower volume in the Variable Print and Strategic Services segments and certain other reporting units within the International segment, as well as price pressures.

Net sales from services for the three months ended September 30, 2017 increased $15.1 million, or 3.8%, to $412.9 million versus the same period in 2016, including a $0.2 million, or 0.1%, increase due to changes in foreign exchange rates. Net sales increased primarily due to higher volume as well as increased fuel surcharges in logistics, partially offset by lower postage pass-through sales within logistics, lower volume in business process outsourcing and price pressures.

Products cost of sales increased $33.4 million, or 3.2%, for the three months ended September 30, 2017 versus the same period in the prior year, primarily due to higher volume and start-up costs within the Asia reporting unit as well as cost inflation, partially offset by lower volume in the Variable Print segment and certain reporting units within the International segment, along with cost control initiatives across the organization. As a percentage of net sales, products cost of sales increased 2.9 percentage points for the three months ended September 30, 2017 versus the same period in 2016, primarily due to an unfavorable mix across the segments.

Services cost of sales increased $15.7 million, or 4.7%, for the three months ended September 30, 2017 versus the same period in the prior year. Services cost of sales increased primarily due to higher volume in freight brokerage and higher costs of transportation in the logistics reporting unit, partially offset by lower postage pass-through sales within logistics and reduced business process outsourcing volume. As a percentage of net sales, services cost of sales increased 0.8 percentage points for the three months ended September 30, 2017 versus the same period in 2016, primarily due to unfavorable revenue mix in business process outsourcing.

Products gross profit decreased $39.2 million to $257.9 million for the three months ended September 30, 2017 versus the same period in 2016 primarily due to price pressures and an unfavorable mix in the Variable Print and International segments, partially offset by cost control initiatives. Products gross margin decreased from 22.4% to 19.5%, driven by price pressures and an unfavorable revenue mix within the International and Variable Print segment, partially offset by cost control initiatives.

Services gross profit decreased $0.6 million to $66.5 million for the three months ended September 30, 2017 versus the same period in 2016 due to decreased volume in the business processing outsourcing reporting unit, an unfavorable revenue mix and higher

costs of transportation in the logistics reporting unit and price pressures, partially offset by increased fuel surcharges in the logistics reporting unit. Services gross margin decreased from 16.9% to 16.1%, reflecting an unfavorable revenue mix and price pressures.

Selling, general and administrative expenses decreased $10.4 million to $207.7 million for the three months ended September 30, 2017 versus the same period in 2016 reflecting lower corporate and other overhead costs related to our operations prior to the Separation, lower healthcare costs and cost control initiatives, partially offset by higher transactional foreign currency expense and higher variable incentive compensation. As a percentage of net sales, selling, general and administrative expenses decreased from 12.6% to 12.0% for the three months ended September 30, 2017 versus the same period in 2016, due to the impact of the aforementioned expenses.

For the three months ended September 30, 2017, the Company recorded net restructuring, impairment and other charges of $33.8 million. These charges included a non-cash charge of $21.3 million for the impairment of goodwill in the digital and creative solutions reporting unit within the Strategic Services segment. The charges also included $10.7 million for employee termination costs, which were related to the reorganization ~~of selling, general and administrative functions primarily within the~~ Corporate and International segments. The Company also incurred lease termination and other restructuring costs of $1.1 million and net impairment charges for other long-lived assets of $0.2 million primarily related to the impairment of equipment in the Variable Print segment during the three months ended September 30, 2017. Additionally, the Company recorded $0.5 million of other charges for multi-employer pension plan withdrawal obligations unrelated to facility closures. Refer to Note 7, ~~Restructuring, Impairment and Other Charges, within the Notes to the Condensed Consolidated Financial Statements for additional information.~~

For the three months ended September 30, 2016, the Company recorded net restructuring, impairment and other charges of $10.8 million. The Company recorded $9.7 million of employee termination costs, primarily related to the reorganization of certain administrative functions and operations. The Company also recorded lease termination and other restructuring charges of $0.6 million and $0.6 million of other charges related to multi-employer pension plan withdrawal obligations unrelated to facility closures for the three months ended September 30, 2016. Additionally, the Company recorded $0.1 million of net gains related to buildings and machinery and equipment associated with facility closures. Refer to Note 7, ~~Restructuring, Impairment and Other Charges, within the Notes to the Condensed Consolidated Financial Statements for additional information.~~

Depreciation and amortization decreased $4.0 million to $47.0 million for the three months ended September 30, 2017 compared to the same period in 2016 primarily due to lower capital spending in recent years compared to historical levels and certain International customer relationship intangible assets becoming fully amortized since the prior year. Depreciation and amortization included $7.1 million and $8.0 million of amortization of other intangible assets related to customer relationships, trade names, trademarks, licenses and agreements for the three months ended September 30, 2017 and 2016, respectively.

~~For the three months ended September 30, 2016, other operating expense was $0.3 million, which consisted of a net loss on the sale of entities in the International segment.~~

Income from operations for the three months ended September 30, 2017 was $35.9 million, a decrease of $48.1 million, or 57.3%, compared to the three months ended September 30, 2016. The decrease was due to higher restructuring, impairment and other charges, the prior year OPEB curtailment gains, lower volume in certain reporting units within the International and Variable Print segments, price pressures, start-up costs within the Asia reporting unit and higher transactional foreign currency expense, partially offset by lower corporate and other overhead costs related to our operations prior to the Separation, higher volume in the Asia reporting unit, lower healthcare costs and depreciation and amortization expense and cost control initiatives.

~~Net interest expense decreased by $5.3 million for the three months ended September 30, 2017 versus the same period in 2016, primarily due to a decrease in average senior notes outstanding.~~

Investment and other income-net for the three months ended September 30, 2017 and 2016 was $2.8 million and $1.0 million, respectively. During the three months ended September 30, 2017, the Company recognized a non-cash net realized gain of $1.6 million on the retained shares of Donnelley Financial exchanged for certain of the Company’s senior notes outstanding. See Note 15, ~~Debt,~~ ~~to the Condensed Consolidated Financial Statements for additional details of the debt-for-equity exchange.~~

Loss on debt extinguishments for the three months ended September 30, 2017 was $6.5 million which related to unamortized debt issuance costs, premiums paid and other expenses associated with the amendment and restatement of the credit agreement as well as the debt-for-equity exchange of senior notes during the three months ended September 30, 2017. Refer to Note 15, ~~Debt,~~ ~~to the Condensed Consolidated Financial Statements for additional details.~~

~~The effective income tax rate for the three months ended September 30, 2017 was 31.0% compared to 38.4% in the same period in 2016.~~ ~~The effective income tax rate for the period ended September 30, 2017~~ ~~reflects the impact of the impairment of goodwill in the digital and creative solutions~~ ~~reporting unit and the inability to recognize a tax benefit on certain losses. The~~ ~~income tax provision for the period ended September 30, 2016 reflects the impact of income generated in higher taxing jurisdictions and the inability to recognize a tax benefit on certain losses.~~

~~Income attributable to noncontrolling interests was $0.2 million and $0.3 million for the three months ended September 30, 2017 and 2016, respectively.~~

The net loss from continuing operations, excluding the impact from non-controlling interests, attributable to RRD common stockholders for the three months ended September 30, 2017 was $8.0 million, or $0.11 per diluted share, compared to net earnings of $22.0 million, or $0.31 per diluted share, for the three months ended September 30, 2016.

The following tables summarize net sales, income (loss) from operations and certain items impacting comparability within each of the operating segments and Corporate. The descriptions of the reporting units generally reflect the primary products or services provided by each reporting unit. Included in these net sales amounts are sales of other products or services that may be produced within a reporting unit to meet customer needs and improve operating efficiency.

Net sales for the Variable Print segment for the three months ended September 30, 2017 were $767.5 million, a decrease of $22.8 million, or 2.9%, compared to 2016, including a $0.3 million increase due to changes in foreign exchange rates. Net sales

decreased due to lower volume primarily in commercial and digital print, direct mail and forms and price pressures, partially offset by higher volume in statement printing and labels. An analysis of net sales by reporting unit follows:

Variable Print segment income from operations decreased $10.8 million for the three months ended September 30, 2017, primarily due to lower volume and unfavorable mix within commercial and digital print and price pressures, partially offset by a favorable mix within statement printing. Operating margins decreased from 6.3% for the three months ended September 30, 2016 to 5.1% for the three months ended September 30, 2017 due to an unfavorable mix within commercial and digital print and price pressures, partially offset by cost control initiatives and a favorable mix within statement printing. Higher restructuring, impairment and other charges unfavorably impacted operating margins by 0.3 percentage points.

Net sales for the Strategic Services segment for the three months ended September 30, 2017 were $443.7 million, a decrease of $1.3 million, or 0.3%, compared to 2016. Net sales decreased primarily due to lower postage pass-through sales in logistics, lower volume in sourcing and digital and creative solutions and price pressures, partially offset by higher volume in freight brokerage and increased fuel surcharges in logistics. An analysis of net sales by reporting unit follows:

Strategic Services segment income from operations decreased $28.1 million for the three months ended September 30, 2017, mainly due to the $21.3 million impairment of goodwill in the digital and creation solutions reporting unit, an unfavorable revenue mix, higher cost of transportation and price pressures within logistics and lower volume in digital and creative solutions, partially offset by increased fuel surcharges. Operating margins decreased from 3.0% to (3.3%), primarily due to higher restructuring, impairment and other charges, an unfavorable revenue mix within the segment and price pressures, partially offset by favorable fuel surcharges in logistics, productivity and cost control initiatives. Higher restructuring, impairment and other charges favorably impacted operating margins by 4.7 percentage points.

Net sales in the International segment for the three months ended September 30, 2017 were $523.7 million, an increase of $33.4 million, or 6.8%, compared to the same period in 2016, inclusive of a $5.0 million, or 1.0%, increase due to changes in foreign exchange rates. Net sales increased due to higher volume in Asia, partially offset by lower volume in Global Turnkey Solutions, business process outsourcing and Canada, as well as price pressures. An analysis of net sales by reporting unit follows:

International segment income from operations decreased $15.4 million primarily due to lower volume in Global Turnkey Solutions and business process outsourcing, cost inflation, higher transactional foreign currency expense, price pressures and start-up costs in Asia, partially offset by increased volume in Asia. Operating margins decreased from 7.3% to 3.9%, driven by lower volume in Global Turnkey Solutions and business process outsourcing, higher transactional foreign currency expense, price pressures, start-up costs in Asia and higher restructuring, impairment and other charges, partially offset by increased volume in Asia. Higher restructuring, impairment and other charges unfavorably impacted operating margins by 0.2 percentage points.

Corporate operating expenses in the three months ended September 30, 2017 were $9.2 million, a decrease of $6.2 million compared to the same period in 2016. The decrease was primarily driven by lower corporate and other overhead costs related to the pre-Separation combined entity, cost control initiatives and lower healthcare costs, partially offset by the prior year OPEB curtailment gains and lower pension and postretirement plan income.

~~RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 AS COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2016~~2020

The following table shows the results of operations for the ~~nine~~three months ended ~~September~~June 30, ~~2017~~2021 and ~~2016, which reflects the results of acquired businesses from the relevant acquisition dates:~~2020:

Nine Months Ended September 30,

2017

2016

$ Change

% Change

(in millions, except percentages)

Products net sales
$
3,830.9

$
3,772.5

$
58.4

1.5
%
Services net sales

1,182.9

1,201.6

(18.7
)

(1.6
%)
Total net sales

5,013.8

4,974.1

39.7

0.8
%
Products cost of sales (exclusive of depreciation and
   amortization)

3,065.7

2,958.1

107.6

3.6
%
Services cost of sales (exclusive of depreciation and
   amortization)

992.8

1,002.9

(10.1
)

(1.0
%)
Total cost of sales

4,058.5

3,961.0

97.5

2.5
%
Products gross profit

765.2

814.4

(49.2
)

(6.0
%)
Services gross profit

190.1

198.7

(8.6
)

(4.3
%)
Total gross profit

955.3

1,013.1

(57.8
)

(5.7
%)
Selling, general and administrative expenses
   (exclusive of depreciation and amortization)

643.6

681.0

(37.4
)

(5.5
%)
Restructuring, impairment and other charges-net

46.7

24.3

22.4

92.2
%
Depreciation and amortization

143.1

153.5

(10.4
)

(6.8
%)
Other operating income

—

(12.0
)

12.0

nm

Income from operations
$
121.9

$
166.3

$
(44.4
)

(26.7
%)

	Three Months Ended
	June 30,
	2021		2020			$ Change			% Change
	(in millions, except percentages)
Net sales		1,145.6		1,009.6			136.0			13.5	%
Cost of sales		928.1		817.3			110.8			13.6	%
Gross profit		217.5		192.3			25.2			13.1	%
Selling, general and administrative expenses (exclusive of depreciation and amortization)		143.8		138.8			5.0			3.6	%
Restructuring, impairment and other-net		9.7		28.4			(18.7	)		(65.8	%)
Depreciation and amortization		32.9		36.9			(4.0	)		(10.8	%)
Other operating expense		2.9		7.2			(4.3	)		(59.7	%)
Income (loss) from operations	$	28.2	$	(19.0	)	$	47.2		nm

Net sales ~~of products~~ for the ~~nine~~three months ended ~~September~~June 30, ~~2017~~2021 increased ~~$58.4~~$136.0 million, or ~~1.5%~~13.5%, to ~~$3,830.9~~$1,145.6 million versus the ~~prior year~~same period ~~including a $7.9~~in 2020. Net sales increased by $21.7 million ~~or 0.2%, decrease~~ due to favorable changes in foreign exchange rates. Net sales ~~of products~~also increased due to higher volume ~~within~~reflectingstrengthening demand for most of our products and services. Notably, higher demand for e-commerce sales have contributed to the ~~Asia~~growth in our Packaging and ~~sourcing reporting units,~~Labels products. The increase also reflects continued recovery from the COVID-19 pandemic, partially offset by ~~lower volume~~ last year’s Census project, which was completed in ~~the Variable Print segment and certain other reporting units within the International segment, as well as price pressures.~~ mid-2020.

~~Net~~Cost of sales ~~from services~~ for the ~~nine~~three months ended ~~September~~June 30, ~~2017 decreased $18.7~~2021 increased $110.8 million, or 13.6%, to ~~$1,182.9~~$928.1 million versus the same period in 2016, including an $8.2 million, or 0.7%, decrease due to change in foreign exchange rates. Net sales decreased primarily due to lower postage pass-through sales within logistics, lower volume in business process outsourcing and price pressures, partially offset by higher volume in freight brokerage and courier services as well as increased fuel surcharges within the logistics reporting unit.

~~Products~~2020. Total cost of sales increased ~~$107.6 million, or 3.6%, for the nine months ended September 30, 2017 versus the same period in the prior year,~~ primarily due to higher volume ~~within the Asia~~across most of our products and ~~sourcing reporting units as well as~~services and higher cost ~~inflation,~~of raw materials, partially offset by ~~lower volume in~~ the ~~Variable Print segment and certain reporting units within the International segment and~~favorable impact of cost ~~control initiatives across the organization.~~reduction activities. As a percentage of net sales, ~~products~~ cost of sales ~~increased 1.6%~~remained relatively unchanged for the ~~nine~~three months ended ~~September~~June 30, ~~2017~~2021 versus the same period in ~~the prior year, primarily due~~2020.

Gross profit increased $25.2 million to ~~an unfavorable mix across the segments.~~

~~Services cost of sales decreased $10.1~~$217.5 million ~~or 1.0%,~~ for the ~~nine~~three months ended ~~September~~June 30, ~~2017~~2021 versus the same period in ~~the prior year. Services cost of sales decreased~~2020, primarily due to ~~lower postage pass-through sales within logistics and reduced business process outsourcing volume, partially offset by~~ higher ~~volume in freight brokerage and courier services and higher costs of transportation in the logistics reporting unit. As a~~volume. Our gross margin percentage ~~of net sales, services cost of sales increased 0.4%~~remained relatively unchanged for the ~~nine~~three months ended ~~September~~June 30, ~~2017~~2021 versus the same period in ~~the prior year driven by an unfavorable revenue mix in business process outsourcing and the logistics reporting unit.~~

Products gross profit decreased $49.2 million to $765.2 million for the nine months ended September 30, 2017 versus the same period in 2016 primarily due to price pressures and lower volume in certain International reporting units and the Variable Print segment, partially offset by higher volume in the Asia reporting unit and cost control initiatives. Products gross margin decreased from 21.6% to 20.0%, driven by price pressures and an unfavorable revenue mix within much of the International and Variable Print segments and the sourcing reporting unit, partially offset by cost control initiatives.

Services gross profit decreased $8.6 million to $190.1 million for the nine months ended September 30, 2017 versus the same period in 2016 due to lower business process outsourcing volume and price pressures, partially offset by increased fuel surcharges within the logistics reporting unit. Services gross margin decreased from 16.5% to 16.1%, primarily reflecting an unfavorable revenue mix.2020.

Selling, general and administrative expenses ~~decreased $37.4~~increased $5.0 million to ~~$643.6~~$143.8 million for the ~~nine~~three months ended ~~September~~June 30, ~~2017~~2021 versus the same period in ~~2016, due~~2020 primarily as a result of increased incentive compensation expense, largely attributable to the ~~pension settlement charge~~increase in ~~the prior year period, lower corporate~~our stock price and ~~other overhead costs related to our operations prior to the Separation, lower bad debt and legal expenses and cost control initiatives,~~unfavorable exchange rates, partially offset by ~~higher transactional foreign currency expense, higher variable incentive compensation expense and lower pension and other post-retirement benefits income.~~cost control initiatives. As a percentage of net sales, selling, general and administrative expenses decreased from 13.7% to ~~12.8%~~12.6% for the ~~nine~~three months ended ~~September~~June 30, ~~2017~~2021 versus the same period in ~~2016, due to~~2020, reflecting the ~~impact~~benefit of ~~the aforementioned expenses.~~ restructuring actions and other costs control initiatives.

For the ~~nine~~three months ended ~~September~~June 30, ~~2017, the Company recorded~~2021, net restructuring, impairment and other charges ~~of $46.7~~decreased $18.7 million to $9.7 million. ~~These charges included~~The decrease was primarily driven by lower restructuring activity, including a ~~non-cash charge of $21.3~~$10.5 million ~~for the impairment of goodwill~~reduction in ~~the digital and creative solutions reporting unit within the Strategic Services segment as well as $19.5 million of~~ employee termination costs, ~~which were related~~and lower consulting costs compared to the reorganization of selling, general and administrative functions primarily within the Corporate, International and Variable Print segments, ceasing the Company’s relationship in a joint venture within the International segment and one facility closure in the Strategic Services segment. The Company also incurred lease termination and other restructuring charges of $3.8 million and net impairment charges for other long-lived assets of $0.4 million for impairment of equipment primarily related to a facility closure in the Strategic Services segment, partially offset by a net gain recognized on the sale of previously impaired equipment during the nine months ended September 30, 2017. Additionally, the Company recorded $1.7 million of other charges for multi-employer pension plan withdrawal obligations unrelated to facility closures. Refer toprior year. See Note 7, Restructuring, Impairment and Other~~Charges, within the Notes to the Condensed Consolidated Financial Statements for additional information.~~

~~For the nine months ended September 30, 2016, the Company recorded net restructuring, impairment~~, and ~~other charges of $24.3 million. The Company recorded $20.7 million of employee termination costs, primarily due to two facility closures in the International segment~~Note 14, Commitment and the reorganization of certain administrative functions and operations. The Company also recorded lease termination and other restructuring charges of $2.9 million and $1.7 million of other charges related to multi-employer pension plan withdrawal obligations unrelated to facility closures for the nine months ended September 30, 2016. Additionally, the Company recorded $1.0 million of net gains on the sale of previously impaired assets, partially offset by impairment charges related to buildings and machinery and equipment associated with facility closures. Refer to Note 7, ~~Restructuring, Impairment and Other Charges~~Contingencies, within the Notes to the Condensed Consolidated Financial Statements for ~~additional information.~~ further discussion.

Depreciation and amortization decreased ~~$10.4~~$4.0 million to ~~$143.1~~$32.9 million for the ~~nine~~three months ended ~~September~~June 30, ~~2017~~2021 compared to the same period in 2016 primarily due to lower capital spending in recent years compared to historical levels and certain International customer relationship intangible assets becoming fully amortized since the prior year quarter.2020. Depreciation and amortization included ~~$21.6 million and $25.7~~$4.8 million of amortization of other intangible assets related to ~~customer~~client relationships and trade names ~~trademarks, licenses~~for each of the three months ended June 30, 2021 and ~~agreements~~2020.

Other operating expense for the ~~nine~~three months ended ~~September~~June 30, ~~2017 and 2016, respectively.~~

~~For the nine months ended September 30, 2016, other operating income~~2021 was ~~$12.0~~$2.9 million ~~which consisted of a net gain on the sale of entities~~compared to $7.2 million in the ~~International segment.~~same period in 2020. The decrease was primarily the result of lower expenses related to the SEC and DOJ investigations and the prior year included a $2.9 million loss on a business disposition which did not occur in the current period.

Income from operations for the ~~nine~~three months ended ~~September~~June 30, ~~2017~~2021 was ~~$121.9~~$28.2 million, ~~a decrease~~an increase of ~~$44.4~~$47.2 million ~~or 26.7%,~~ compared to a loss of $19.0 million for the ~~nine~~three months ended ~~September~~June 30, 2016. The decrease was due to lower volume in certain reporting units within the International and Variable Print segments, price pressures, higher restructuring, impairment and other charges, the prior year OPEB curtailment gains, the prior year net gain on the sale of entities in the International segment and higher transactional foreign currency expense, partially offset by the prior year pension settlement charge, lower corporate and other overhead costs related to our operations prior to the Separation, higher volume in the Asia reporting unit, reduced bad debt, legal and depreciation and amortization expenses and cost control initiatives.2020.

Net interest expense ~~decreased~~increased by ~~$13.3~~$3.9 million to $38.5 million for the ~~nine~~three months ended ~~September~~June 30, ~~2017~~2021 versus the same period in ~~2016, primarily due~~2020. Net interest expense included $9.2 million related to ~~lower average borrowings and a lower weighted average~~the termination of certain interest rate ~~during the nine months ended September 30, 2017.~~

Net investment and other income-net for the nine months ended September 30, 2017 and 2016 of $47.2 million and $0.4 million, respectively. For the nine months ended September 30, 2017, the Company recorded a non-cash net realized gain of $94.0 million on the retained shares of Donnelley Financial exchanged for certain of the Company’s senior notes outstanding and a gain of $1.3 million resulting from the sale of certain of the Company’s affordable housing investments, partially offset by a net realized loss of $51.6 million resulting from the sale of the Company’s retained shares of LSC.

Loss on debt extinguishments for the nine months ended September 30, 2017 was $20.1 million which related to premiums paid in connection with the tenders, unamortized debt issuance costs and other expenses associated with the debt-for-equity exchange of senior notes, the repurchase of debentures and senior notes and the amendment and restatement of the credit agreement.swaps. Refer to Note ~~15,~~ ~~Debt,~~16 – Derivatives within the Notes to the Condensed Consolidated Financial Statements for ~~additional details.~~further discussion. Excluding the effects of the swap termination, our interest expense decreased approximately $5 million primarily due to prior repurchases and repayment of higher interest rate debt and lower average borrowings and interest rates on the ABL Credit Facility.

The ~~effective income tax rate~~loss on debt extinguishment in the three month period ended June 30, 2021 primarily resulted from the write-off of debt issuance costs and discount related to the Term Loan.

Investment and other income-net for the ~~nine~~three months ended ~~September~~June 30, ~~2017~~2021 and 2020 was ~~(63.2%) compared to 80.1% in the same period in 2016.~~ $4.9 million and $3.4 million respectively, primarily comprised of net OPEB and pension income.

The income tax ~~rate~~benefit and expense for the ~~period ended nine~~three months ended ~~September~~June 30, ~~2017 reflects~~2021 and 2020 were primarily driven by the mix of earnings, the tax impact of ~~impairment of goodwill~~our interest expense, and changes in ~~the digital and creative solutions reporting unit, the inability to recognize a~~ tax benefit on certain losses and the impact of the net gain on the disposition of investments. The Donnelley Financial retained shares were disposed in a non-taxable debt-for-equity exchange. The sale of the LSC retained shares generated a capital loss which will be carried forward; however, it is more likely than not that the benefit of such deferred tax asset will not be fully realized and a valuation allowance was recorded. The income tax provision for the nine months ended September 30, 2016 reflects the impact of income generated in higher taxing jurisdictions and the inability to recognize a tax benefit on certain losses.laws.

~~Income attributable to noncontrolling interests was $0.7 million and $0.8 million for the nine months ended September 30, 2017 and 2016, respectively.~~

Net ~~earnings from continuing operations, excluding the impact from non-controlling interests,~~loss attributable to RRD common stockholders was $9.4 million for the ~~nine~~three months ended ~~September~~June 30, ~~2017 was $18.4 million, or $0.26 per diluted share,~~2021 compared to ~~$2.4~~a loss of $57.2 million ~~or $0.03 per diluted share,~~ for the ~~nine~~three months ended ~~September~~June 30, ~~2016.~~2020.

Net sales for the Variable Print segment for the nine months ended September 30, 2017 were $2,279.6 million, a decrease of $32.2 million, or 1.4%, compared to 2016, including a $0.2 million increase due to changes in foreign exchange rates. Net sales decreased due to lower volume primarily in commercial and digital print, direct mail, forms and price pressures, partially offset by the incremental sales from the Precision Dialogue acquisition. An analysis of net sales by reporting unit follows:

Variable Print segment income from operations decreased $29.8 million for the nine months ended September 30, 2017 primarily due to lower volume within commercial and digital print and direct mail, price pressures and higher variable incentive compensation, partially offset by a favorable mix within statement printing, labels and forms. Operating margins decreased from 6.2% for the nine months ended September 30, 2016 to 5.0% for the nine months ended September 30, 2017 due to lower volume and an unfavorable mix within commercial and digital print and direct mail and price pressures, partially offset by cost control initiatives and a favorable mix within statement printing, labels and forms. Higher restructuring, impairment and other charges unfavorably impacted operating margins by 0.1 percentage points.

~~Net sales for the Strategic~~Business Services segment for the ~~nine~~three months ended ~~September~~June 30, ~~2017~~2021 were ~~$1,274.3~~$909.6 million, an increase of ~~$44.7~~$114.0 million, or 3.6%, compared to 2016. Net sales increased primarily due to higher volume in sourcing, freight brokerage and courier services and increased fuel surcharges in logistics, partially offset by lower postage pass-through sales in logistics. An analysis of net sales by reporting unit follows:

Strategic Services segment income from operations decreased $32.3 million for the nine months ended September 30, 2017, mainly due to the impairment of goodwill in digital and creative solutions, lower volume in print logistics and digital and creative solutions, price pressures, higher costs of transportation in logistics and higher variable incentive compensation, partially offset by increased fuel surcharges within logistics and productivity and cost control initiatives. Operating margins decreased from 2.1% for the nine months ended September 30, 2016 to (0.5%) for the nine months ended September 30, 2017 primarily due to higher restructuring, impairment and other charges, unfavorable mix within the segment, price pressures and higher variable incentive compensation, partially offset by favorable fuel surcharges in logistics, increased productivity and cost control initiatives. Higher restructuring, impairment and other charges negatively impacted operating margins by 1.7 percentage points.

~~Net sales in the International segment for the nine months ended September 30, 2017 were $1,459.9 million, an increase of $27.2 million, or 1.9%~~14.3%, compared to the same period in ~~2016, inclusive of a $16.3~~2020. Net sales increased $21.7 million ~~or 1.1%, decrease~~ due to favorable changes in ~~foreign~~ exchange rates. Net sales also increased due to higher volume reflectingstrengthening demand for most of our products and services. Notably, higher demand for e-commerce sales have contributed to thegrowth in ~~Asia, partially offset by lower volume in Global Turnkey Solutions, business process outsourcing~~our Packaging and ~~Canada, as well as price pressures. An analysis of~~Labels products. The increase also reflects continued recovery from the COVID-19 pandemic. The following table summarizes net sales by ~~reporting unit follows:~~products and services in the Business Services segment:

~~International~~Services segment income from operations ~~decreased $48.0~~increased $38.1 million to $55.2 million for the three months ended June 30, 2021, primarily due to ~~lower~~higher volume, in Global Turnkey Solutions, Canada and business process outsourcing, the prior year $12.6 million gain recognized on the sale of businesses, higher costs of transactional foreign exchange expense, as well as price pressures, higher restructuring, impairment and other charges and higher variable incentive compensation, partially offset by increased volume in Asia and lower bad debt expense. Operating margins decreased from 7.1% for the nine months ended September 30, 2016 to 3.7% for the nine months ended September 30, 2017, driven by the prior year $12.6 million gain recognized on the sale of businesses, lower volume in Global Turnkey Solutions, Canada and business process outsourcing, higher transactional foreign exchange expense, price pressures, higher restructuring, impairment and other charges and higher variable incentive compensation, partially offset by increased packaging volume in Asia and lower bad debt expense. The prior year gain on the sale of businesses and higher restructuring, impairment and other charges negatively impacted operating margins by 0.9 and 0.2 percentage points, respectively.

Corporate operating expenses in the nine months ended September 30, 2017 were $39.1 million, a decrease of $65.7 million compared to the same period in 2016. The decrease was primarily driven by the prior year pension settlement charge, lower corporate and other overhead costs related to the pre-Separation combined entity, lower legal and bad debt expenses, cost control initiatives and lower restructuring, impairment and other ~~charges-net,~~expenses, partially offset by unfavorable foreign exchange rates of approximately $10.0 million.

Net sales for the Marketing Solutions segment for the three months ended June 30, 2021 were $236.0 million, an increase of $22.0 million, or 10.3%, compared to the same period in 2020. Net sales increased primarily due to higher volume and higher prices, partially offset by the effects of the 2020 Census contract, which was substantially completed by June 30, 2020.

The following table summarizes net sales by products and services in the Marketing Solutions segment:

Marketing Solutions segment income from operations for the three months ended June 30, 2021 was $9.0 million, an increase of $10.8 million compared to a loss of $1.8 million for the same period in 2020, primarily due to higher volume reflective of continued recovery from the COVID-19 pandemic and cost control initiatives, partially offset by the Census contract which was substantially completed by mid-2020.

Corporate operating expenses during the three months ended June 30, 2021 were $36.0 million, an increase of $1.7 million compared to the same period in 2020. The increase is primarily driven by increased incentive compensation expense, largely attributable to an increase in our stock price, partially offset by lower other selling, generally and administrative expenses.

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2021 AS COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2020

The following table shows the results of operations for the six months ended June 30, 2021 and 2020:

Net sales for the six months ended June 30, 2021 increased $92.2 million, or 4.1%, to $2,318.7 million versus the same period in 2020. Net sales increased $36.2 million due to favorable changes in foreign exchange rates and were unfavorably impacted by $6.5 million due to the Chile business closure in 2020. In addition to these factors, net sales also increased due to higher volume reflectingstrengthening demand for most of our products and services. Notably, higher demand for e-commerce sales have contributed to thegrowth in our Packaging and Labels products. The increase also reflects continued recovery from the COVID-19 pandemic, partially offset by the Census project, which was completed in mid-2020.

Cost of sales for the six months ended June 30, 2021 increased $91.2 million, or 5.1%, to $1,877.1 million versus the same period in 2020, primarily due to higher volume and higher cost of raw materials.

Gross profit increased $1.0 million to $441.6 million for the six months ended June 30, 2021 versus the same period in 2020, primarily due to higher volume. Gross margin percentage decreased from 19.8% to 19.0% for the six months ended June 30, 2021 versus the same period in 2020, primarily reflecting the impact of unfavorable foreign exchange rates and rising costs of raw materials.

Selling, general and administrative expenses decreased $1.6 million to $297.1 million for the six months ended June 30, 2021 versus the same period in 2020, reflecting cost control initiatives, partially offset by unfavorable foreign exchange rates and higher incentive compensation expense. As a percentage of net sales, selling, general and administrative expenses was 12.8% for the six months ended June 30, 2021 versus 13.4% in the same period in 2020.

For the six months ended June 30, 2021, net restructuring, impairment and other expense decreased by $24.1 million to $15.5 million versus the same period in 2020. The decrease was primarily driven by lower restructuring activity, gains on sale of several facilities, and modest gains related to the settlement of certain LSC MEPP liabilities. See Note 7, Restructuring, Impairment, and Other, and Note 14, Commitment and Contingencies within the Notes to the Condensed Consolidated Financial Statements for further discussion.

Depreciation and amortization decreased $9.4 million to $66.7 million for the six months ended June 30, 2021 compared to the same period in 2020. Depreciation and amortization included $9.5 million and $9.7 million of amortization of other intangible assets related to client relationships and trade names for the six months ended June 30, 2021 and 2020, respectively.

Other operating expense for the six months ended June 30, 2021 was $9.0 million compared to $12.1 million for the same period in 2020. Other operating expenses in both periods primarily included expenses related to the ongoing SEC and DOJ investigations.

Income from operations for the six months ended June 30, 2021 was $53.3 million, an increase of $39.2 million compared to the six months ended June 30, 2020.

Net interest expense increased $0.5 million to $69.0 million for the six months ended June 30, 2021 versus the same period in 2020. Net interest expense included $9.2 million related to the termination of certain interest rate swaps in the second quarter of 2021. See Note 16 – Derivatives within the Notes to the Condensed Consolidated Financial Statements for further discussion. Excluding the effects of the swap termination, our interest expense decreased approximately $9 million, primarily due to prior ~~year OPEB curtailment gain,~~repurchases and repayment of higher interest rate debt and lower average borrowings and interest rates on the newly amended ABL Credit Facility.

Investment and other income, net for the six months ended June 30, 2021 and 2020 was $9.7 million and $7.2 million, respectively, and principally comprised of net pension and ~~postretirement plan~~OPEB income.

The income tax benefit and expense for the six months ended June 30, 2021 and 2020 were primarily driven by the mix of earnings, the tax impact of our interest expense and changes in tax laws.

Net income from discontinued operations was $0.6 million for the six months ended June 30, 2021 compared to a loss of $19.9 million in the same period in 2020. The net income from discontinued operations for the six months ended June 30, 2021 reflects the settlement of certain contingencies associated with the business divestitures and final net working capital adjustments. The net loss from discontinued operations in the first half of 2020 was primarily driven by a $20.6 million non-cash charge related to impairment of goodwill and $9.1 million pre-tax loss on the sale of our Courier Logistics business.

Net loss attributable to RRD common stockholders was $10.7 million and $70.2 million for the six months ended June 30, 2021 and 2020, respectively.

Net sales for the Business Services segment for the six months ended June 30, 2021 were $1,831.7 million, an increase of $143.0 million, or 8.5%, compared to the six months ended June 30, 2020. Net sales increased $36.2 million due to favorable changes in foreign exchange rates and were unfavorably impacted by $6.5 million due to the Chile business closure in 2020. Net sales also increased due to higher ~~variable~~volume reflectingstrengthening demand for most of our products and services. Notably, higher demand for e-commerce sales have contributed to thegrowth in our Packaging and Labels products. The increase also reflects continued recovery from the COVID-19 pandemic. The following table summarizes net sales by products and services in the Business Services segment:

Business Services segment income from operations increased $53.6 million to $108.4 million for the six months ended June 30, 2021, primarily due to increased volume, increased prices, cost reductions and lower restructuring, impairment and other expenses, partially offset by the impact of unfavorable foreign exchange rates of approximately $20 million.

Net sales for the Marketing Solutions segment for the six months ended June 30, 2021 were $487.0 million, a decrease of $50.8 million compared to the six months ended June 30, 2020. Net sales decreased due to lower volume in direct marketing attributable to the 2020 Census contract, which was substantially completed in mid-2020, partially offset by higher order volume from several existing customers reflecting continued recovery from the COVID-19 pandemic.The following table summarizes net sales by products and services in the Marketing Solutions segment:

Marketing Solutions segment income from operations decreased $0.3 million to $22.8 million for the six months ended June 30, 2021 as a result of the 2020 Census contract which was substantially completed in mid-2020, partially offset by cost control initiatives.

Corporate operating expenses during the six months ended June 30, 2021 were $77.9 million, compared to $63.8 million for the six months ended June 30, 2021, an increase of $14.1 million. The increase was primarily driven by increased incentive compensation ~~and spinoff-related transaction expenses.~~expense, largely attributable to an increase in our stock price.

~~The Company believes it has~~We believe that we have sufficient liquidity to support ~~its~~our ongoing operations and to invest in future growth to create value for ~~its~~our stockholders. ~~Operating~~Our operating cash flows, existing cash balances and available capacity under ~~the Company’s $800.0 million~~our asset-based senior secured revolving credit facility (the ~~“Credit Agreement”~~“ABL Credit Facility”) are ~~the Company’s~~our primary sources of liquidity and are expected to be used for, among other things, capital expenditures, completion of restructuring programs and payment of interest and principal on ~~the Company’s~~our long-term debt obligations, distributions to stockholders that may be approved by the Board of Directors, acquisitions, capital expenditures necessary to support productivity improvement and growth and completion of restructuring programs.obligations.

The following describes ~~the Company’s~~our cash flows for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016. The Company’s cash flows for all periods prior to the October 1, 2016 Distribution include the impact of LSC and Donnelley Financial. Refer to Note 2,~~ ~~Discontinued Operations, to the Condensed Consolidated Financial Statements for information on the significant non-cash items, capital expenditures and depreciation and amortization related to LSC and Donnelley Financial.~~2020.

Operating cash inflows are largely attributable to sales of ~~the Company’s~~our products and services. Operating cash outflows are largely attributable to recurring expenditures for raw materials, labor, rent, interest, taxes and other operating activities.

Net cash used in operating activities was ~~$12.6~~$64.8 million ~~for the nine months ended September 30, 2017,~~ compared to ~~net cash provided by operating activities of $7.8~~$44.2 million ~~during the same period~~ in ~~2016.~~ 2020. The ~~decrease~~increase in ~~net cash provided by operating activities~~2021 was driven by ~~lower cash earnings,~~ $23.9 million of LSC bankruptcy related payments primarily associated with lump sum settlements of two MEPP plans, higher tax and incentive compensation payments, and a $9.2 million payment to terminate certain interest rates swaps, partially offset by ~~the~~ ~~timing of supplier~~lower restructuring and ~~customer payments and lower~~ interest ~~spinoff-related transaction and tax payments~~.

~~Net cash provided by investing activities for the nine months ended September 30, 2017 was $48.0 million compared to~~payments. Included in net cash used in operating activities were the following operating cash outflows:

Significant cash (outflows) inflows included in investing and financing activities for each period were as follows:

Proceeds from disposition of $167.9 million for the nine months ended September 30, 2016. Capital expenditures were $77.2 million during the first nine months of 2017, a decrease of $70.7 million as compared to the same period of 2016 primarily driven by LSC and Donnelley Financial capital expendituresbusinesses in ~~the prior year period of $49.0 million. For the nine months ended September 30, 2017, cash provided by investing activities included net proceeds of $121.4 million from~~2020 principally reflect the sale of the Company’s retained interest in LSC. For the nine months ended September 30, 2016, the Company paid $47.5 million to acquire Precision Dialogue. Additionally, for the nine months ended September 30, 2016, cash used in investing activities included $13.7 million of proceeds primarily from business dispositions in the International segment.

Net cash used in financing activities for the nine months ended September 30, 2017 was $139.1 million compared to net cash provided by financing activities of $187.4 million in the same period in 2016. During the nine months ended September 30, 2017, theCourier Logistics business.

~~Company had $1,000.0 million and $1,165.0 million~~Proceeds from issuances of ~~payments and borrowings, respectively, under~~long-term debt during the ~~Company’s credit facilities, compared to none in the prior year period. During the nine~~six months ended ~~September~~June 30, 2017, the Company paid approximately $200.4 million to repurchase certain senior notes and debentures outstanding through borrowings under the Company’s credit facilities. During the nine months ended September 30, 2016, the Company repurchased $503.6 million of aggregate principal of senior notes using the proceeds from2021 reflects the issuance of ~~senior notes and~~$450 million of 6.125% senior secured term loan B facilities of $450.0 million and $725.0 million, respectively, issued by its formerly, wholly-owned subsidiaries LSC and Donnelley Financial, which proceeds were received as distributions by the Company immediately prior to the Separation. Additionally,notes due 2026 during the ~~nine months ended September 30, 2016, cash~~second quarter. Payments of current maturities and long-term debt in the first half of 2021 primarily reflects the repayment of $387.6 million of principal on ~~hand~~the Term Loan and the ~~borrowings under the prior credit agreement were used to pay $219.8~~repayment of $55.6 million of the ~~8.60% senior~~debentures that matured on April 15, 2021. Payments of current maturities and long-term debt in the first half of 2020 represent repurchases of outstanding debt with maturities from 2020 to 2024 along with the repayment of the remaining balance of the notes that matured on ~~August~~June 15, ~~2016.~~

~~Additionally, dividends paid decreased $133.8~~2020. We had $30 million ~~from $163.2 million during~~of borrowings under our ABL Credit Facility at the ~~nine months ended September 30, 2016~~end of the second quarter of 2021. In the first half of 2020, we increased our borrowings under the ABL Credit Facility to ~~$29.4 million during~~retain financial flexibility in light of the nine months ended September 30, 2017. During the nine months ended September 30, 2017, the Company paid the final spinoff cash settlement of $78.0 million to LSC and Donnelley Financial as required by the Separation and Distribution agreement.emerging COVID-19 pandemic.

Cash and cash equivalents of ~~$225.8~~$237.2 million as of ~~September~~June 30, ~~2017~~2021 included ~~$41.2~~$24.3 million in the U.S. and ~~$184.6~~$212.9 million at international locations. The Company’s foreign subsidiaries are expected to make payments of approximately $17.9 million during the remainder of 2017 in satisfaction of intercompany obligations. The Company has recognized deferred tax liabilities of $5.7 million as of September 30, 2017 related to local taxes on certain foreign earnings that are not considered to be permanently reinvested. Certain other cash balances of foreign subsidiaries may be subject to U.S. or local country taxes if repatriated to the U.S. In addition, repatriation of some foreign cash balances is further restricted by local laws. Management regularly evaluates whether foreign earnings are expected to be permanently reinvested. This evaluation requires judgment about the future operating and liquidity needs of the Company and its foreign subsidiaries. Changes in economic and business conditions, foreign or U.S. tax laws, or the Company’s financial situation could result in changes to these judgments and the need to record additional tax liabilities.

Included in ~~cash~~Cash and cash equivalents at ~~September~~June 30, ~~2017~~2021 were ~~$23.8~~$23.4 million of short-term investments, which primarily consisted of short-term deposits and money market funds. These investments are held at institutions with sound credit ratings and are expected to be highly liquid.

~~In March 2017, the Company sold the 6,242,802 common shares it retained upon the spinoff of LSC~~ We maintain cash pooling structures that enable participating international locations to draw on our international cash resources to meet local liquidity needs. Foreign cash balances may be loaned from certain cash pools to U.S. operating entities on a temporary basis in order to reduce our short-term borrowing costs or for net proceeds of $121.4 million. The proceeds of this sale were used to repay a portion of the outstanding borrowings under the Company’s credit facility. In June 2017, the Company exchanged 6,143,208 of the 6,242,802 shares of Donnelley Financial retained upon the spinoff for $111.6 million of aggregate principal of certain outstanding senior notes. In August 2017, the Company disposed of its remaining retained shares in Donnelley Financial via a second debt-for-equity exchange, pursuant to which the Company exchanged 99,594 shares of Donnelley Financial’s common stock for $1.9 million of aggregate principal of certain outstanding senior notes. Such debt obligations were cancelled and discharged upon delivery to the Company. As of September 30, 2017, the Company no longer held any shares of LSC or Donnelley Financial common stock.

~~The Company’s debt maturities as of September 30, 2017 are shown in the following table:~~

On June 7, 2017, the Company repurchased $41.7 million of the 6.625% debentures due April 15, 2029, $59.4 million of the 6.50% senior notes due November 15, 2023 and $101.7 million of the 6.00% senior notes due April 1, 2024 using borrowings under the prior credit agreement. The repurchases resulted in a net gain of $0.8 million which was recognized within loss on debt extinguishments in the Condensed Consolidated Statements of Operations during the nine months ended September 30, 2017 related to the difference between the fair value of the debt repurchased and the principal outstanding, partially offset by premiums paid, unamortized debt issuance costs and other ~~expenses.~~

On May 22, 2017, certain third party financial institutions (such financial institutions collectively, the “Third Party Purchasers”), launched cash tender offers for certain of the Company’s outstanding debt securities, including the Company’s 7.625% senior notes due June 15, 2020 and 7.875% senior notes due March 15, 2021. On June 7, 2017, the Third Party Purchasers purchased $111.6 million in aggregate principal amount of the 7.625% senior notes due June 15, 2020 (the “Third Party Purchase Notes”). On June 21, 2017, the Company exchanged 6,143,208 of its retained shares of Donnelley Financial for the Third Party Purchase Notes. The Company cancelled the Third Party Purchase Notes on June 21, 2017. As a result, the Company recognized a ~~$14.4 million~~ loss on debt extinguishment in the Condensed Consolidated Statements of Operations during the nine months ended September 30, 2017 related to premiums paid, unamortized debt issuance costs and other expenses. In addition, the Company recognized a net realized gain of ~~$92.4 million~~ resulting from the disposition of the retained shares of Donnelley Financial common stock within investment and other income-net in the Condensed Consolidated Statements of Operations during the nine months ended September 30, 2017.

As described above, on August 4, 2017, the Company disposed of its remaining 99,594 shares of Donnelley Financial common stock in exchange for the extinguishment of $1.9 million in aggregate principal of the Company’s 7.875% senior notes due March 15, 2021. As a result, the Company recognized a $0.3 million loss on debt extinguishments in the Condensed Consolidated Statements of Operations during the three and nine months ended September 30, 2017, related to premiums paid, unamortized debt issuance costs and other expenses. In addition, the Company recognized a net realized gain of $1.6 million resulting from the disposition of these retained shares of Donnelley Financial common stock within investment and other income-net in the Condensed Consolidated Statements of Operations during the ~~three and nine months ended~~ ~~September 30, 2017~~.

On September 29, 2017, the Company entered into an asset-based revolving credit facility pursuant to the second amended and restated credit agreement (the “Credit Agreement”) which amended and restated the Company’s $800.0 million senior secured revolving credit facility dated September 30, 2016. The Credit Agreement provides for a senior secured asset-based revolving credit facility of up to $800.0 million subject to a borrowing base. The amount available to be borrowed under the Credit Agreement is equal to the lesser of (a) $800.0 million and (b) the aggregate amount of accounts receivable, inventory, machinery and equipment and fee-owned real estate of the Company and certain of its domestic subsidiaries (the “Guarantors”) (collectively, the “Borrowing Base”), subject to certain eligibility criteria and advance rates. The aggregate amount of real estate, machinery and equipment that can be included in the Borrowing Base cannot exceed $200.0 million. Aspurposes. As a result of ~~entering into~~ the ~~Credit Agreement, the Company recognized~~Tax Act, we have opportunities to repatriate foreign cash, primarily generated from current year earnings, in a $6.2 million loss related to unamortized debt issuance costs and other expenses within loss on debt extinguishments in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2017.tax efficient manner.

~~Borrowings under the Credit Agreement~~ bear interest at a rate dependent on the average quarterly availability under the Credit Agreement and will be calculated according to a base rate or a Eurocurrency rate plus an applicable margin. The applicable margin for base rate loans ranges from 0.25% to 0.50% and the applicable margin for Eurocurrency loans ranges from 1.25% to 1.50%. In addition, an unused line fee is payable quarterly on the unused portion of the amount available to be borrowed under the Credit Agreement. The unused line fee accrues at a rate of either 0.250% or 0.375% depending upon the average usage of the facility.

Proceeds of the loans under the Credit Agreement may be used for working capital and general corporate purposes. The Company’s obligations under the Credit Agreement are guaranteed by its material and certain domestic subsidiaries and are secured by a security interest in certain assets of the Company and its domestic subsidiaries, including accounts receivable, inventory, deposit accounts, securities accounts, investment property, machinery and equipment and, to the extent related to the foregoing, general intangibles, documents and instruments, as well as 65% of the equity interests of its first-tier foreign subsidiaries.

~~The Credit Agreement is subject to~~ customary restrictive covenants, including a covenant which requires the Company to maintain a minimum fixed charge coverage ratio under certain circumstances. In addition, the Company’s ability to undertake certain actions, including, among other things, prepay certain junior debt, incur additional unsecured indebtedness and make certain restricted payments depends on satisfaction of certain conditions, including, among other things, meeting minimum availability thresholds under the Credit Agreement.

There were $350.0 million of borrowings under the Credit Agreement as of September 30, 2017. Based on the Company’s borrowing base as of September 30, 2017 and existing borrowings, the Company had the ability to utilize approximately $384.9 million of the $800.0 million Credit Agreement.

The current availability under the ABL Credit ~~Agreement~~Facility as of ~~September~~June 30, ~~2017~~2021 is shown in the table below:

~~As of September 30, 2017, the Company was in compliance with the debt covenants under the Credit Agreement~~ and expects to remain in compliance based on management’s estimates of operating and financial results for 2017 and the foreseeable future. However, declines in market and economic conditions or demand for certain of the Company’s products and services could impact the Company’s ability to remain in compliance with its debt covenants in future periods. As of September 30, 2017, the Company met all the conditions required to borrow under the Credit Agreement and management expects the Company to continue to meet the borrowing conditions.

The failure of a financial institution supporting the ABL Credit ~~Agreement~~Facility would reduce the size of ~~the Company’s~~our committed facility unless a replacement institution was added. ~~Currently,~~At June 30, 2021, the ABL Credit ~~Agreement is~~Facility was supported by eight U.S. financial institutions.

On April 16, 2021, we amended the ABL Credit Facility to, among other things, extend the maturity date from September ~~30, 2017,~~29, 2022 to April 16, 2026 and reduce the ~~Company had $176.7~~aggregate commitments from $800 million ~~in other uncommitted credit facilities, primarily outside the U.S. (the “Other Facilities”)~~to $650 million. There were $103.3 million in outstanding letters of credit, bank guarantees and bank acceptance drafts which reduced availability, of which $29.7 million were issued under the Credit Agreement. Total borrowings under the Credit Agreement and the Other Facilities (the “Combined Facilities”) were $367.6 million as of September 30, 2017.

The Company’s liquidity may be affected by its credit ratings. The Company’s Standard & Poor Rating Services (“S&P”) and Moody’s credit ratings as of September 30, 2017 are shown in the table below:

During the ~~nine months ended September~~fourth quarter of 2017, we entered into an agreement to sell a printing facility in Shenzhen, China and transfer the related land use rights. As of June 30, ~~2017,~~2021, we have received deposits in accordance with the ~~Company~~terms of the agreement of approximately $123.3 million. These deposits are recorded in Other noncurrent liabilities on the Condensed Consolidated Balance Sheets. In accordance with the agreement, additional scheduled deposits are required to be paid ~~cash dividends~~to us with the final payment due in 2022. The closing date of ~~$29.4 million.~~ the final sales transaction is uncertain at this time due to the uncertainty around the timing of the regulatory process including government approvals.Gross proceeds from the sale are expected to be approximately $250.0 million, subject to changes in the exchange rate. If the buyer fails to comply with terms of the agreement or terminates for any reason, we are entitled to retain 30% of the purchase price as liquidated damages. As of June 30, 2021, the carrying cost of the building and land use rights is recorded in Other noncurrent assets and is not material.

On ~~October 25, 2017,~~April 6, 2020, the Board of Directors of the Company ~~declared~~made a ~~quarterly cash dividend~~decision to suspend all dividends payments as part of ~~$0.14 per common share payable on December 1, 2017 to RRD stockholders of record on November 15, 2017.~~

During the nine months ended September 30, 2016, the Company paid $47.5 million, net of cash acquired, to acquire Precision Dialogue. Additionally, during the nine months ended September 30, 2016, the Company sold immaterial entities within the International segment for net proceeds of $13.7 million.

~~On September 30, 2016,~~ the Company’s then wholly-owned subsidiary Donnelley Financial issued senior notes and incurred a senior secured term loan B facility with total aggregate principals of $300.0 million and $350.0 million, respectively. Additionally on September 30, 2016, the Company’s then wholly-owned subsidiary LSC issued senior notes and incurred a senior secured term loan B facility with total aggregate principal of $450.0 million and $375.0 million, respectively. All of the related net proceeds were distributedresponse to the Company or exchanged for debt in connection with the Separation. After the Separation, RR Donnelley has no obligations as it relates to these senior notes, senior secured term loan B facilities or any other LSC or Donnelley Financial indebtedness.COVID-19 pandemic.

~~The Company is~~We are exposed to interest rate risk on ~~its~~our variable debt and price risk on ~~its~~our fixed-rate debt. ~~At September 30, 2017,~~Including the ~~Company’s variable-interest borrowings were $367.6 million. Approximately 83.8%~~effect of the ~~Company’s~~floating-to-fixed interest rate swaps (see Note 16, Derivatives, to the Condensed Consolidated Financial Statements),approximately 95.0% of our outstanding debt was comprised of fixed-rate debt as of ~~September~~June 30, ~~2017.~~2021.

~~The Company assesses~~We assess market risk based on changes in interest rates utilizing a sensitivity analysis that measures the potential loss in earnings, fair values and cash flows based on a hypothetical 10% change in interest rates. Using this sensitivity analysis, such changes would not have a material effect on interest income or expense and cash flows and would change the fair values of fixed-rate debt at ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016~~2020 by approximately ~~$50.2~~$30.7 million and ~~$69.6~~$23.7 million, respectively.

~~The Company is~~We are exposed to the impact of foreign currency fluctuations ~~in certain countries in which it operates. The exposure to foreign~~based on our global operations. Foreign currency ~~movements is limited in many countries because~~fluctuations affect the ~~operating~~U.S. dollar value of revenues earned and expenses ~~of its various subsidiaries and business units~~incurred in foreign currencies. We are ~~substantially in the local~~also exposed to currency ~~of the country in which they operate. To~~risk to the extent ~~that borrowings, sales, purchases, revenues, expenses~~we own assets or incur liabilities, or enter into other transactions that are not in the ~~local~~functional currency of the subsidiary in which we operate. We employ different practices to manage these risks, including where appropriate the ~~Company is exposed to currency risk and may enter into~~use of derivative instruments, such as foreign currency ~~contracts to hedge the currency risk.~~forwards. As of ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016,~~2020, the aggregate notional amount of outstanding foreign currency contracts was approximately ~~$136.7~~$268.7 million and ~~$172.2~~$220.7 million, respectively (see Note ~~17,~~ 16, Derivatives, to the Condensed Consolidated Financial Statements). ~~Net~~The net unrealized ~~gains~~gain from these foreign currency contracts ~~were $0.5~~was $1.9 million at ~~September~~June 30, ~~2017~~2021 and ~~$0.2~~$3.6 million at December 31, ~~2016. The Company does~~2020. We do not use derivative financial instruments for trading or speculative purposes.

For a discussion of certain litigation, ~~involving the Company,~~ see Note 14, Commitments and Contingencies, to the Condensed Consolidated Financial Statements.

Recently issued accounting standards and their estimated effect on ~~the Company’s~~our condensed consolidated financial statements are described in Note ~~19,~~ 17, New Accounting Pronouncements, to the Condensed Consolidated Financial Statements.

~~The Company has made forward-looking statements in this~~This Quarterly Report on Form 10-Q ~~that~~and any documents incorporated by reference contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and ~~uncertainties. These statements~~uncertainties and are based on ~~the~~our beliefs and ~~assumptions of the Company.~~assumptions. Generally, forward-looking statements include information concerning our possible or assumed future actions, events, or results of ~~operations of the Company.~~

operations. These statements may include, or be preceded or followed by, the words “may,” “will,” “should,” “might,” “could,” “would,” “potential,” “possible,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “hope” or similar ~~expressions. The Company claims~~expressions and their negative variations. We claim the protection of the ~~Safe Harbor~~safe harbor for ~~Forward-Looking Statements~~forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 for all forward-looking statements.

Forward-looking statements are not guarantees of performance. The factors identified below are believed to be significant factors, but not necessarily all of the significant factors, that could cause actual results to differ materially from those expressed in any forward-looking statement. Unpredictable or unknown factors could also have material effects on us.

The following important factors, in addition to those discussed elsewhere in this Quarterly Report on Form 10-Q and under the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, could affect ~~the~~our future results ~~of the Company~~ and could cause those results or other outcomes to differ materially from those expressed or implied in our forward-looking statements:

Because forward-looking statements are subject to assumptions and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. There may be other risks and uncertainties that we are unable to identify at this time or that we do not currently expect to have a material impact on the business. Undue reliance should not be placed on such statements, which speak only as of the date of this document or the date of any document that may be incorporated by reference into this document.

Consequently, readers of this Quarterly Report on Form 10-Q should consider these forward-looking statements only as ~~the Company’s~~our current plans, estimates and beliefs. ~~The Company does not~~We undertake and specifically declines any obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect future events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. The Company undertakes no obligation to update or revise any forward-looking statements in this Quarterly Report on Form 10-Q to reflect any new events or any change in conditions or circumstances.

See Item 2 of Part I under “Management of Market Risk.” There have been no significant changes to ~~the Company’s~~our market risk since December 31, ~~2016.~~2020. For a discussion of exposure to market risk, refer to Part II, Item 7A – Quantitative and Qualitative Disclosures about Market Risk, set forth in ~~the Company’s 2016~~our 2020 Form 10-K.

As required by Rule 13a-15(b) and Rule 15d-15(e) of the Securities Exchange Act of 1934, the Company’s management, including the Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining effective disclosure controls and procedures, as defined under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934. As of ~~September~~June 30, ~~2017,~~2021, an evaluation was performed under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures as of ~~September~~June 30, ~~2017~~2021 were effective in ensuring information required to be disclosed in our SEC reports was recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information was accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

There were no changes in ~~the Company’s~~our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) that occurred during the quarter ended ~~September~~June 30, ~~2017~~2021 that had materially affected, or were reasonably likely to materially affect, ~~the Company’s~~our internal control over financial reporting.

We have not experienced any material impact to our internal controls over financial reporting despite the fact that most of our employees are working remotely due to the COVID-19 pandemic. We are continually monitoring and assessing the impact of the COVID-19 pandemic on our internal controls to ensure they remain effective.

For a discussion of certain litigation, ~~involving the Company,~~ see Note 14, Commitments and Contingencies, to the Condensed Consolidated Financial Statements.

There is no material change in the information reported under "Part 1 -Item 1A Risk Factors" contained in our annual Report on Form 10-K for the fiscal year ended December 31, 2020.

~~The Credit Agreement generally allows annual dividend payments~~There were no issuer purchases of ~~up to $60.0 million in aggregate, though additional dividends may be allowed subject to certain conditions. For more detail refer to~~equity securities during the ~~Credit Agreement and its amendments filed as exhibits to this Quarterly Report on Form 10-Q.~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Delaware		36-1004130
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

35 West Wacker Drive, Chicago, Illinois		60601
(Address of principal executive offices)		(Zip code)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	RRD	New York Stock Exchange
Preferred Stock Purchase Rights		New York Stock Exchange

Large Accelerated filer	☒☐	Accelerated filer	☒	☐

Non-Accelerated filer	☐ ~~(Do not check if a smaller reporting company)~~	Smaller reporting company	☐	☐

~~Emerging growth company~~	☐		Emerging growth company	☐

		Page
	PART I
~~FINANCIAL INFORMATION~~

Item 1:1.	Condensed Consolidated ~~Financial Statements (unaudited)~~Balance Sheets as of June 30, 2021 and December 31, 2020	3

	~~Condensed Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016~~	3

	Condensed Consolidated Statements of Operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016~~2020	4

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016~~2020	5

	Condensed Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016~~2020	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2:2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
		23
Item 3:3.	Quantitative and Qualitative Disclosures About Market Risk	52
		35
Item 4:4.	Controls and Procedures	5235

	PART II

~~OTHER INFORMATION~~

Item 1:1.	Legal Proceedings	53
		36
Item 2:1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	53
		36
Item 4:6.	~~Mine Safety Disclosures~~Exhibits	53

~~Item 6:~~	~~Exhibits~~	5437

Signatures		5538

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Commercial print		340.3	$	275.5	$	676.8	$	638.9
Packaging		179.7		150.4		354.1		265.5
Labels		131.3		113.7		260.0		235.3
Direct marketing		113.6		108.0		244.5		290.8
Digital print and fulfillment		101.7		84.7		199.2		198.3
Statements		99.3		101.9		217.8		228.8
Supply chain management		67.3		64.9		140.0		134.6
Forms		48.8		48.6		97.6		101.0
Business process outsourcing		42.9		40.6		85.4		84.6
Digital and creative solutions		20.7		21.3		43.3		48.7
Total net sales	$	1,145.6	$	1,009.6	$	2,318.7	$	2,226.5

Supplemental cash flow disclosures:

Operating cash flows provided by discontinued operations	$	—	$	16.4
Investing cash flows used in discontinued operations	$	—	$	(0.9	)

	June 30, 2021		December��31, 2020
Cash and cash equivalents	$	237.2	$	288.8
Restricted cash - current^(a)		58.9		62.6
Restricted cash - noncurrent^(b)		0.1		6.2
Total cash, cash equivalents and restricted cash	$	296.2	$	357.6

	As Reported		Adjustments		As Revised
Three months ended March 31, 2016
Products net sales	$	1,242.7	$	13.1	$	1,229.6
Total net sales		1,645.6		13.1		1,632.5
Products cost of sales		971.9		13.1		958.8
Total cost of sales		1,313.1		13.1		1,300.0
Three months ended June 30, 2016
Products net sales	$	1,231.7	$	16.6	$	1,215.1
Total net sales		1,632.6		16.6		1,616.0
Products cost of sales		985.2		16.6		968.6
Total cost of sales		1,316.2		16.6		1,299.6
Three months ended September 30, 2016
Products net sales	$	1,343.4	$	15.6	$	1,327.8
Total net sales		1,741.2		15.6		1,725.6
Products cost of sales		1,046.3		15.6		1,030.7
Total cost of sales		1,377.0		15.6		1,361.4
Three months ended December 31, 2016
Products net sales	$	1,470.3	$	17.4	$	1,452.9
Total net sales		1,876.3		17.4		1,858.9
Products cost of sales		1,161.0		17.4		1,143.6
Total cost of sales		1,512.6		17.4		1,495.2
Three months ended March 31, 2017
Products net sales	$	1,288.9	$	17.4	$	1,271.5
Total net sales		1,676.3		17.4		1,658.9
Products cost of sales		1,024.3		17.4		1,006.9
Total cost of sales		1,348.5		17.4		1,331.1
Three months ended June 30, 2017
Products net sales	$	1,263.4	$	26.0	$	1,237.4
Total net sales		1,646.0		26.0		1,620.0
Products cost of sales		1,020.7		26.0		994.7
Total cost of sales		1,342.9		26.0		1,316.9

	Three Months Ended			Nine Months Ended
	September 30, 2016			September 30, 2016
Net sales	$	1,122.6		$	3,303.4
Cost of sales		879.1			2,534.7
Operating expenses ^(a)		170.0			592.0
Interest and other expense net^(b)		104.0			139.5
(Loss) earnings before income taxes		(30.5	)		37.2
Income tax (benefit) expense		(1.4	)		21.4
Net (loss) earnings from discontinued operations	$	(29.1	)	$	15.8

	~~(b)~~Short-Term
Balance at December 31, 2020	Includes the related interest expense of the corporate level debt which was retired in connection with the Separation totaling $17.8 million and $53.6 million for the three and nine months ended September$15.6
Balance at June 30, 2016, respectively. Also includes the losses on the extinguishment of corporate level debt executed in conjunction with the spinoff transactions totaling $85.3 million, for the three and nine months ended September 30, 2016. 2021	$11.9

			Restructuring		Foreign
	December 31,		and Other		Exchange and		Cash			June 30,
	2020		Charges		Other		Paid			2021
Employee terminations	$	6.2	$	3.7	$	0.1	$	(4.1	)	$	5.9
MEPP withdrawal obligations		70.2		0.2		—		(21.6	)		48.8
Other		12.2		11.6		0.2		(9.2	)		14.8
Total	$	88.6	$	15.5	$	0.3	$	(34.9	)	$	69.5

	RRD
	Stockholders'			Noncontrolling
	Equity			Interest			Total Equity
Balance at December 31, 2016	$	(105.7	)	$	13.5		$	(92.2	)
Net earnings		18.4			0.7			19.1
Other comprehensive (loss) income		(70.8	)		0.4			(70.4	)
Share-based compensation		6.4			—			6.4
Spinoff adjustments		5.9			—			5.9
Issuance of share-based awards, net of withholdings and other		(1.7	)		—			(1.7	)
Cash dividends paid		(29.4	)		—			(29.4	)
Distributions to noncontrolling interests		—			(0.7	)		(0.7	)
Balance at September 30, 2017	$	(176.9	)	$	13.9		$	(163.0	)

	Changes in the Fair Value of Available-for-Sale Securities			Pension and Other Postretirement Benefits Plan Cost			Translation Adjustments			Total
Balance at December 31, 2016	$	119.3		$	(159.5	)	$	(15.5	)	$	(55.7	)
Other comprehensive (loss) income before reclassifications		(48.5	)		—			43.6			(4.9	)
Amounts reclassified from accumulated other comprehensive loss		(70.8	)		2.1			2.8			(65.9	)
Net change in accumulated other comprehensive loss		(119.3	)		2.1			46.4			(70.8	)
Balance at September 30, 2017	$	—		$	(157.4	)	$	30.9		$	(126.5	)

	Changes in the Fair Value of Derivatives			Pension and OPEB Cost			Translation Adjustments			Total
Balance at December 31, 2020	$	(11.0	)	$	(178.5	)	$	35.6		$	(153.9	)
Other comprehensive loss before reclassifications		(2.2	)		—			(0.1	)		(2.3	)
Amounts reclassified from accumulated other comprehensive loss		11.2			2.1			—			13.3
Net change in accumulated other comprehensive loss		9.0			2.1			(0.1	)		11.0
Balance at June 30, 2021	$	(2.0	)	$	(176.4	)	$	35.5		$	(142.9	)

	Three Months Ended September 30,						Nine Months Ended September 30,						Classification in the Condensed Consolidated
	2017			2016			2017			2016			Statements of Operations
Translation Adjustments:
Net realized loss	$	2.8			—		$	2.8			—		Selling, general and administrative expenses
Reclassifications before tax		2.8			—			2.8			—
Income tax benefit		—			—			—			—
Reclassification, net of tax	$	2.8		$	—		$	2.8		$	—
Amortization of pension and other postretirement benefits plan cost:
Net actuarial loss	$	1.9		$	7.8		$	5.4		$	23.5		Cost of sales; Selling, general and administrative expenses
Net prior service credit		(0.7	)		(4.0	)		(2.2	)		(12.0	)	Cost of sales; Selling, general and administrative expenses
Settlements		—			1.6			—			98.5		Cost of sales; Selling, general and administrative expenses
Curtailments		—			(19.7	)		—			(19.7	)	Cost of sales; Selling, general and administrative expenses
Reclassifications before tax		1.2			(14.3	)		3.2			90.3
Income tax expense (benefit)		0.5			(7.9	)		1.1			35.1
Reclassification, net of tax	$	0.7		$	(6.4	)	$	2.1		$	55.2
Available-for-sale securities:
Net realized gain on equity securities		(1.8	)		—			(52.8	)		—		Investment and other income-net
Reclassifications before tax		(1.8	)		—			(52.8	)		—
Income tax benefit		—			—			18.0			—
Reclassification, net of tax		(1.8	)		—			(70.8	)		—
Total reclassifications, net of tax	$	1.7		$	(6.4	)	$	(65.9	)	$	55.2

	Three Months Ended June 30,						Six Months Ended June 30,						Classification in the Condensed
	2021			2020			2021			2020			Consolidated Statements of Operations
Amortization of pension and OPEB cost:
Net actuarial loss	$	2.6		$	1.4		$	5.4		$	3.0		Investment and other income-net
Net prior service credit		(1.3	)		(0.4	)		(2.7	)		(1.0	)	Investment and other income-net
Reclassifications before tax		1.3			1.0			2.7			2.0
Income tax benefit		0.3			0.3			0.6			0.5
Reclassification, net of tax		1.0			0.7		$	2.1		$	1.5

Derivatives:
Net realized loss	$	9.9		$	1.0		$	11.2		$	0.8		Interest expense-net
Reclassification, net of tax		9.9			1.0			11.2			0.8
Total reclassifications, net of tax	$	10.9		$	1.7		$	13.3		$	2.3

	September 30, 2017		December 31, 2016
Derivatives not designated as hedges
Prepaid expenses and other current assets	$	1.5	$	1.7
Accrued liabilities		1.0		1.5

	Classification on Consolidated Balance Sheets	June 30, 2021		December 31, 2020
Derivative assets
Foreign currency contracts:
Not designated as hedging instruments	Prepaid expenses and other current assets	$	1.9	$	5.9

Derivative liabilities
Foreign currency contracts:
Not designated as hedging instruments	Accrued liabilities and other	$	—	$	2.3
Interest rate swap agreements:
Designated as cash flow hedges	Accrued liabilities and other		1.3		5.0
Designated as cash flow hedges	Other noncurrent liabilities		1.3		9.6

		Three Months Ended				Nine Months Ended
	Classification of (Gain) Loss Recognized in the	September 30,				September 30,					Three Months Ended June 30,						Six Months Ended June 30,
	Condensed Consolidated Statements of Operations	2017		2016		2017		2016		Classification of Loss (Gain) Recognized in the Consolidated Statements of Operations	2021			2020			2021			2020
Derivatives not designated as hedges	Derivatives not designated as hedges
Foreign currency contracts	Selling, general and administrative expenses	$	0.5	$	0.8	$	1.1	$	3.4	Selling, general and administrative expenses	$	(7.4	)	$	(0.1	)	$	(5.0	)	$	1.1
Derivatives designated as cash flow hedges
Interest rate swap agreements										Interest expense, net		9.9			1.0			11.2			0.8

			Basis of Fair Value Measurement
	Balance as of September 30, 2017		Significant Other Observable Inputs (Level 2)
Assets
Foreign currency contracts	$	1.5	$	1.5
Total assets	$	1.5	$	1.5
Liabilities
Foreign currency contracts		1.0		1.0
Total liabilities	$	1.0	$	1.0

			Basis of Fair Value Measurement
	Balance as of December 31, 2016		Significant Other Observable Inputs (Level 2)
Assets
Foreign currency contracts	$	1.7	$	1.7
Available-for-sale securities	328.7		328.7
Total assets	$	330.4	$	330.4
Liabilities
Foreign currency contracts	1.5		1.5
Total liabilities	$	1.5	$	1.5

	Income from Operations			Operating Margin			Net Earnings (Loss) From Continuing Operations Attributable to RRD Common Stockholders			Net Earnings (Loss) Attributable to RRD Stockholders Per Diluted Share
	(in millions, except margin and per share data)
For the Three Months Ended September 30, 2016	$	84.0			4.9	%	$	22.0		$	0.31
2017 restructuring, impairment and other charges - net		(33.8	)		(1.9	%)		(26.5	)		(0.37	)
2016 restructuring, impairment and other charges - net		10.8			0.6	%		2.2			0.03
OPEB curtailment gains		(19.7	)		(1.1	%)		(12.2	)		(0.17	)
Pension settlement charges		0.3			—			0.3			—
Acquisition-related expenses		0.7			—			0.4			0.01
Loss on disposition of businesses		0.3			—			0.1			—
Loss on debt extinguishments		—			—			(4.3	)		(0.06	)
Net gain on investments		—			—			1.7			0.02
Operations, including the impact of foreign exchange		(6.7	)		(0.4	%)		8.3			0.12
For the Three Months Ended September 30, 2017	$	35.9			2.1	%	$	(8.0	)	$	(0.11	)

	Three Months Ended September 30,
	2017		2016		$ Change			% Change
	(in millions, except percentages)

Products net sales	$	1,322.0	$	1,327.8	$	(5.8	)		(0.4	%)
Services net sales		412.9		397.8		15.1			3.8	%
Total net sales		1,734.9		1,725.6		9.3			0.5	%
Products cost of sales (exclusive of depreciation and amortization)		1,064.1		1,030.7		33.4			3.2	%
Services cost of sales (exclusive of depreciation and amortization)		346.4		330.7		15.7			4.7	%
Total cost of sales		1,410.5		1,361.4		49.1			3.6	%
Products gross profit		257.9		297.1		(39.2	)		(13.2	%)
Services gross profit		66.5		67.1		(0.6	)		(0.9	%)
Total gross profit		324.4		364.2		(39.8	)		(10.9	%)
Selling, general and administrative expenses (exclusive of depreciation and amortization)		207.7		218.1		(10.4	)		(4.8	%)
Restructuring, impairment and other charges-net		33.8		10.8		23.0		nm
Depreciation and amortization		47.0		51.0		(4.0	)		(7.8	%)
Other operating expense		—		0.3		(0.3	)	nm
Income from operations	$	35.9	$	84.0	$	(48.1	)		(57.3	%)

	Net Sales for the Three Months Ended
	September 30,
Reporting unit	2017		2016		$ Change			% Change
	(in millions, except percentages)
Commercial and digital print	$	395.9	$	414.9	$	(19.0	)		(4.6	%)
Direct mail		139.5		144.5		(5.0	)		(3.5	%)
Statement printing		90.2		85.9		4.3			5.0	%
Labels		101.2		98.7		2.5			2.5	%
Forms		40.7		46.3		(5.6	)		(12.1	%)
Total Variable Print	$	767.5	$	790.3	$	(22.8	)		(2.9	%)

	Nine Months Ended September 30,
	2017		2016			$ Change			% Change
	(in millions, except percentages)

Products net sales	$	3,830.9	$	3,772.5		$	58.4			1.5	%
Services net sales		1,182.9		1,201.6			(18.7	)		(1.6	%)
Total net sales		5,013.8		4,974.1			39.7			0.8	%
Products cost of sales (exclusive of depreciation and amortization)		3,065.7		2,958.1			107.6			3.6	%
Services cost of sales (exclusive of depreciation and amortization)		992.8		1,002.9			(10.1	)		(1.0	%)
Total cost of sales		4,058.5		3,961.0			97.5			2.5	%
Products gross profit		765.2		814.4			(49.2	)		(6.0	%)
Services gross profit		190.1		198.7			(8.6	)		(4.3	%)
Total gross profit		955.3		1,013.1			(57.8	)		(5.7	%)
Selling, general and administrative expenses (exclusive of depreciation and amortization)		643.6		681.0			(37.4	)		(5.5	%)
Restructuring, impairment and other charges-net		46.7		24.3			22.4			92.2	%
Depreciation and amortization		143.1		153.5			(10.4	)		(6.8	%)
Other operating income		—		(12.0	)		12.0		nm
Income from operations	$	121.9	$	166.3		$	(44.4	)		(26.7	%)

	Net Sales for the Nine Months Ended
	September 30,
Reporting unit	2017		2016		$ Change			% Change
	(in millions, except percentages)
Commercial and digital print	$	1,178.8	$	1,201.8	$	(23.0	)		(1.9	%)
Direct mail		392.0		395.8		(3.8	)		(1.0	%)
Statement printing		286.1		283.6		2.5			0.9	%
Labels		293.4		293.8		(0.4	)		(0.1	%)
Forms		129.3		136.8		(7.5	)		(5.5	%)
Total Variable Print	$	2,279.6	$	2,311.8	$	(32.2	)		(1.4	%)

	Three Months Ended
	June 30,
Products and Services	2021		2020		$ Change			% Change
	(in millions, except percentages)
Commercial print	$	340.3	$	275.5	$	64.8			23.5	%
Packaging		179.7		150.4		29.3			19.5	%
Labels		131.3		113.7		17.6			15.5	%
Statements		99.3		101.9		(2.6	)		(2.6	%)
Supply chain management		67.3		64.9		2.4			3.7	%
Forms		48.8		48.6		0.2			0.4	%
Business process outsourcing		42.9		40.6		2.3			5.7	%
Total Business Services	$	909.6	$	795.6	$	114.0			14.3	%

	Debt Maturity Schedule
	Total		2017		2018		2019		2020		2021		Thereafter
	(in millions)
Senior notes and debentures and borrowings under the Credit Agreement _(a)	$	2,245.8	$	—	$	—	$	172.2	$	238.4	$	529.1	$	1,306.1
Miscellaneous debt obligations		17.9		17.9	—		—		—		—		—
Total	$	2,263.7	$	17.9	$	—	$	172.2	$	238.4	$	529.1	$	1,306.1

	September 30, 2017
Availability	(in millions)
Committed Credit Agreement	$	800.0
Availability reduction due to available borrowing base		35.4
	$	764.6
Usage
Borrowings under the Credit Agreement		350.0
Outstanding letters of credit		29.7
		379.7
Current availability at September 30, 2017	$	384.9

	~~S&P~~	~~Moody's~~
~~Long-term corporate credit rating~~	~~B+, Stable~~	~~B1, Stable~~
~~Senior unsecured debt~~	B+	B2
~~Credit Agreement~~	BB	~~Ba1~~

ISSUER PURCHASES OF EQUITY SECURITIES

Period	Total Number of Shares Purchased (a)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
July 1, 2017 - July 30, 2017		102	$	11.97	—	$	—
August 1, 2017 - August 31, 2017	—		—		—	$	—
September 1, 2017 - September 30, 2017		—	—		—	$	—
Total		102	$	11.97	—

~~10.1~~
4.1		Indenture, dated as of April 28, 2021, among R.R. Donnelley & Sons Company, the subsidiary guarantors party thereto and U.S. Bank National Association, as trustee and as notes collateral agent (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed April 29, 2021).

4.2		Form of 6.125% Senior Secured Notes due 2026 (included in Exhibit 4.1).

4.3		Supplemental Indenture No. 1, dated as of May 10, 2021, among R.R. Donnelley & Sons Company, the subsidiary guarantors party thereto, solely for the purposes of Article III, Section 4.1, Section 4.7, Section 4.8 and Section 4.13 of Supplemental Indenture No. 1, RRD Netherlands LLC, as specified pledgor, and U.S. Bank National Association, as trustee and as notes collateral agent (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed May 11, 2021).

4.4		Second ~~Amended~~Amendment to Rights Agreement, dated as of May 17, 2021, between R. R. Donnelley & Sons Company and ~~Restated~~Computershare Trust Company, N.A., as rights agent (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed May 18, 2021).

10.1		Amendment No. 2 to Credit Agreement, dated as of ~~September 29, 2017,~~April 16, 2021, among ~~R.R.~~R. R. Donnelley and Sons Company, the guarantors party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed ~~October 3, 2017)~~April 19, 2021).
~~10.2~~		Employment Offer Letter dated October 25, 2017 between R.R. Donnelley & Sons Company and Michael J. Sharp (incorporated by reference to Exhibit10.1 to the Company’s Current Report on Form 8-K filed October 30, 2017)
31.1*		Certification by Daniel L. Knotts, President and Chief Executive Officer, required by Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934

31.2*		Certification by Terry D. Peterson, Executive Vice President and Chief Financial Officer, required by Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934

32.1**		Certification by Daniel L. Knotts, President and Chief Executive Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code

32.2**		Certification by Terry D. Peterson, Executive Vice President and Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code

101.INS		Inline XBRL Instance Document

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

R.R. DONNELLEY & SONS COMPANY

By:		/s/ TERRY D. PETERSON
		Terry D. Peterson
		Executive Vice President and Chief Financial Officer Duly Authorized Officer and Principal Financial Officer